Green Mountain Coffee Roasters (GMCR)

We have been singularly unsuccessful with this stock ever time we have recommended it. Bill O’Neil taught us that once you identify a big winner, never stop stalking it for ideal entry until it gives you reason to believe its story is at a conclusion.

We don’t believe GMCR’s story is anywhere near an epilogue.

GMCR purchased the Keurig coffee system and transformed the company into a growth vehicle. Perhaps last month’s most sensational takeover story was Peet’s (PEET) acquisition of Diedrich (DDRX), a maker under license of K-Cups, the consumables for the Keurig system. One look at the charts of the these two companies tells you that the Keurig system remains a growth driver and that GMCR should have significant upside yet ahead of it.

Yet the stock has been a hard hold, making sporadic outsized gains followed by torturous periods of trailing the market.

We like GMCR here for a few reasons. First, price is rising on some volume off the 50 MA, often an ideal entry point for an uptrending stock. Price has risen in two of the last five days off the MA on average or above average volume. The rest of the days the stock essentially based on light volume.

More importantly there is an actionable event in front of us. The company is due to report earnings Wednesday after the bell.

We’re interested in immediate entry in the stock using the 50 MA as our stop. Will we hold through earnings? If the stock moves Tuesday and Wednesday to give us sufficient cushion the answer is “yes.”