GMCR investors rewarded?

After investors sat through GMCRs earning debacle, they were rewarded this morning with dilution. The company announces this morning, they are going to add 4 million more shares to the pot. After a glowing earnings report, this action leaves me scratching my head.

Second stage bases...IBD TV

IBD TV mentioned GMCR tonight. They said the stock continues to be caffeinated, the stock gapped down on better than expected earnings, but lower than expected revenue for the quarter, but investors soon changed their view higher along with the company’s increased guidance. It is a very bullish sign. It’s up 8% from the buy point of the cup shaped pattern. They also said that the stock doesn’t quite meet the criteria of being a railroad track pattern, which is a bearish pattern. The next thing to look for is for the stock to pullback and offer an alternate buy point assuming the stock advances some more.

OK, folks we have a few stocks setting up second stage bases. For you William O’Neal Investor Business Daily people, second stocks that surge out of second stage basis tend to be the most powerful. GMCR, NTES (Netease), and STEC all seem to be meet this criteria.

GMCR turns around

I can't believe what I saw today. Yesterday, I wrote:

Of course, we never know what tomorrow could bring. A few weeks ago a company missed their numbers and opened down hard the next morning, but by the end of the day closed up.

Today, that happened. Green Mountain Coffee Roasters went down 8% in the after hours after their earnings release. This morning, the stock was set to open down around $59 a share when I checked the morning bid. Before noon, today, the stock was reaching a new 52 week high. Not only had it reverse all of it's loses, it soared! GMCR has very high short interest so I suppose many of the short sellers were covering their loses. This may have been a simple short squeeze. Nevertheless, the stock performed well today considering the after hours action yesterday. Simply amazing to me.

The overall market was very strong today. The Dow Crossed the 9200 mark for a short time and the 1,000 psychological target for the S&P was almost reached before the market pulled back to settle into the close.

In the after hours, Disney reported earnings. They were not great, but it was no surprise to me considering we just vacationed there 2 weeks ago and did not have any lines longer than 30 minutes to ride a single ride at the Magic Kingdom! No crowds anywhere. We had a great time, but I knew sales would suffer. Room rates at the Holiday Inn were $30 a night! That was another tip that things were not going well there.