Monday, July 8, 2013
KKD Krispy Kreme Doughnuts Weekly and Daily Charts Overbot Rising Wedges Negative Divergence
Perhaps Keystone should listen to himself about shorting momo stocks. KKD is a darling of momo traders recently and they continue to pump it higher. Keystone started shorting donuts at the tail end of last week and has an ongoing KKD short trade. The purple dots show the moving average ribbon at its maximum levels for both the daily and weekly charts with price above the 20 MA above the 50 above the 200. There is no where else to go on the top side. The overbot conditions, rising wedges and negative divergence all indicate that a smack down is pending. There is some near-term momo so price can move sideways for a few days, or even a week or three, before rolling over, but the easy money has already been made on this one.
The daily chart shows a rising wedge completing two weeks ago which would have been and ideal time for a continued lower move, but as the central bankers keep pumping equity markets, seeing their main function as keeping the stock market elevated, money ran into KKD to pump it higher to the current potential top. Projection is that the donuts are stale and sitting on the counter too long. KKD should move sideways to sideways lower moving forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.