The most notable aspect of the price action today is the serious beating the year-to-date leaders are taking. A quick sample from my trading screen:
- P down 11.5%
- GMCR down 7.5%
- GRPN down 5.8%
- LNKD down 3.5%
- NFLX down 3.5%
Positioning is clearly playing a factor as all of these high beta leaders move down together today. However, among those names, only GMCR is seeing serious technical damage on the mover lower today. The other 4 stocks are still all above their 50 day moving averages (though NFLX’s bearish engulfing candle today looks quite ugly).
GMCR is actually trading at its 100 day moving average for the first time since Nov. 2012, when the stock was trading below $25. Quite a 1 year run:
The stock has been a trend follower’s dream, holding the 50 day moving average for most of the run higher. Today’s break though puts the stock at a 1 month low, and near the midpoint of the range since the stock’s early May earnings gap.
Perhaps more amazing is that short interest has remained very elevated in GMCR during the whole run higher:
The short interest is essentially unchanged in 2013, and still remains at around 26% of the stock’s float. Some very stubborn shorts indeed.
For now, the clear downside area to watch is 67-70. The low in July was around 68, and the stock’s low from its May gap higher was 67. GMCR’s break today could spell its first sustained selloff of 2013. Keep an eye on the other leaders in case potential uptrend breaks multiply.