Keurig Green Mountain (GMCR) is starting to look interesting on the buy side.
Let's start with timing. I'm seeing a confluence of cycles that came into play around Dec. 9-12. A low was made into this time window on Dec. 9. At the same time, GMCR was testing a price cluster of support at the $124.53-$128.97 area. The actual low was made at $129.36, which is close enough for government work. So, with this time and price hit, if price continues to hold above this key low, the upside potential is $166.90. This target is calculated by running the 1.272 extension of the Nov. 18 high to the Dec. 9 low. Let's look at the lower timeframe chart next.
There have been buy triggers that have already fired off on the buy side on the lower-timeframe chart. Ideally price will hold above the $132.00-$134.07 area if we are going to see higher prices in this one sooner rather than later. Bottom line, I would continue to take any buy triggers in this one if price can continue to hold above the Dec. 9 low. If this same low is taken out, I will back off the buy side until further notice.
Last week I gave you a buy setup in Agios Pharma (AGIO). This is where we had some really nice symmetry support within an uptrend. For those who would like to see an example of a trigger and how to use these types of trade decisions, you can see where price held above the setup support zone at the $105-$106 area. Once price holds above an area we are interested in, we want to go down to a lower-timeframe chart and look for a trigger. A trigger is essentially the price action that suggests it's worth placing a bet against the key price support decision. Let's look at an example of a trigger that fired off on a 15-minute chart.
You can see on the 15-minute that after AGIO held support the triggered fired off when the 8/34 EMA crossover to the upside was seen along with taking out the prior high at $110.96. If you entered the trade around this area, your initial stop could have been defined below the recent low at $105.78. I hope the trigger example helps for future trade setups. You can also check out my prior article on trades and triggers.
