GMCR is one of the most oversold, if not THE most oversold, stock I’ve ever seen. However, there’s no end in sight, and oversold can always get more oversold. Just take a look at the weekly RSI5: 3.63…
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The wave count has GMCR topped in Cycle 1 last year at around $160. Price is now in a correction, and what we see on the monthly charts are that the lower Bollinger band, and the monthly pivots and support in 2012, 2013, 2014 are all around $65-$60. Also, price found support in that area late 2013. Hence, that’s a nice area of support for the continuously falling price.
If we take a look at the wave-count chart (see below) we can first draw a line from the Primary III top to the C1 (cycle 1) top, and creat a parallel line from the Primary IV low (blue lines). If we then draw a line from III to IV, and then draw a similar parallel line from C1 (white lines) it hits, of course the blue line, but it’s right at the 61.8% of all of C1, as well as right around the 138.2% of yellow a, from b, and again right around the aforementioned levels: $65-$60.
The 61.8% retrace is often related to a 2nd wave, and this makes me wonder if the upcoming low is Cycle 2 instead of Primary A. Regardless, it will be an important low. If it is “only” primary A, then there’s likely up to 100% upside (~$120). If it is C2, then C3 could go to $380s… that’s 600+% upside… Happy trading GMCR! 🙂