Coffee Names Are Cooling Off

• Posted by Greg Harmon
• on October 11th, 2011

Coffee stocks are the next group that look to be getting a bit tired. These high fliers, had been leading the market before the recent push to new lows and took over the mantle as leaders again on the move higher. But some are now back at resistance levels and showing signs of topping. Let’s take a look.

Caribou Coffee Co, $CBOU

This had been a short trade recommendation in the premium service two weeks ago that worked well. Now it is back to resistance and has the 100 day Simple Moving Average (SMA) just overhead. The Relative Strength Index (RSI) has remained bearish, under 60 for the full run lower and is still bearish. Notice that the last 2 days are showing topping tails as the last potential sign of a pullback.

Green Mountain Coffee, $GMCR

The king of the coffee momentum names has played well lately with the Andrew’s Pitchfork tool. After it broke below the bullish (green) Pitchfork it ran lower to the Median Line of the bearish (red) Pitchfork. Now bouncing higher off of it the Median Line it is stalling at the 100 day SMA and the Median Line is pulling it back lower. There are topping tails here as well and the entire move higher has been with declining volume

Peet’s Coffee & Tea, $PEET

This name has been bouncing in a range between 52 and 59.40 since mid August. At the top of that range it is showing topping tails with a doji Monday and Tuesday. The RSI remains under 60 here as well.

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