Why I Just Bought The Perfect Technical Breakout In Caribou Coffee Company (CBOU)

Posted by Timothy Sykes on Thu 28th of May, 2009 06:06:25 PM

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I know, I know, you ALLLLL saw my video from the other week with my take on all the hot coffee plays

CLICK HERE TO WATCH THE QUICK BUT SADLY UNEMBEDDABLE VIDEO

…where I said I was looking to short CBOU…

Well, I still don’t believe in the company or the reasoning behind the runup, but who cares what I think…my trades are based on price action and despite it looking like it was about to roll over last week, today it showed breakout possibilities so I sent this mid-afternoon to TIMalert subscribers:

Bought 2000 CBOU at 6.40…potential intraday, multi-day, multi-week breakout…I know I said it was a potential short a few days ago, but the chart is too strong to ignore and even though the fundamentals don’t support a move higher, the shorts can and will get squeezed if this thing breakouts past $6.50…my goal is to sell in the mid $7s or even the $8s as this thing has proven, along with DDRX, that this sector is hot and can really move…nice high volume today too sets the stage nicely for the next 1-2 days, cut losses quickly if the breakout fails

You can see on the charts below that it soon after broke out on every important time frame on huuuuge volume, meaning the odds are high to very high that we will see further short-term upside:

Some TIMalert subscribers have already taken their profits and left:

in @ 6.45, out @ 6.87 five minutes later
-O.

nice. In 1k CBOU at 6.475…out at 6.85 for a quick $375 profit
-Reaper

Out + $370 on CBOU in 20 minutes of work HAHA
-TraderJoe

Bought 1000 @6.70 , sold at @6.90 for $180 profit. More importantly, I’m learning the game. Thanks Tim!
-P.

sold at 6.82 gives me about 140 after commissions.
-ehrof

…but I held, my 2,000 shares overnight as I still expect the mid to high $7s tomorrow or next week, especially since this stock has proven it can move faaaast, the similar breakout price action in DDRx after it consolidated in the $8-$10 range and the overall hotness of this coffee sector.

Sure, I’m already up $800 or so, but the markets are very kind to hot stock breakouts now and shorts everywhere are scared…hehehehehe, it feels good to trade both sides.

To anticipate those of you who will inevitably whine and moan, “you’re a flip flopper”; you’re damn right I am…this isn’t politics, flip-flopping is encouraged in trading you friggin morons!

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Related Reading

3 Hot Coffee Stocks Breaking Out Of Multi-Month Bases (Massive Buy Signal) October 19, 2009
How My Subscribers And I Made $10,000+ Buying & Holding A Hot Stock Overnight April 26, 2009
Why I Bought The Hottest Coffee Stock Around April 21, 2009

Ron

How do you know that CBOU will go up based on high volume ? maybe the high volume was already contributed by the short seller and the stock will be down now ?

Timothy Sykes

Ron, you can never "know", its all about picking high probability setups, this is one....thats all i ever try to do and my track record speaks for itself

Jamal

Actually, it was hardly a high probability setup, I'm a TImalert subscriber and I refused to trade it (but well done to you and the guys that made on it!!) there was no way to suggest that this was a confirmed breakout as the price never pulled back to retest the broken resistance to confirm that this was now support.

you could have actually bought the breakout of $6 in the first 15 minutes of the open as the weekly chart shows this to be a clear former support/now resistance. That was definetly more "high probability" then the 6.40 entry, but again it never pulled back for confirmation. thats why i steered clear both times, but well done to the guys that didn't!!

timothysykes

twas a perfect setup, failed to breakout past 6.50 in the morning, then failed again in the afternoon, 3rd time was the charm...after the initial squeeze, it pulled back perfectly to the 6.55 area, setting up for a morning spike...done, done and done, just had to be quick, i made $1200, timalert subscribers made a few thousand, the patient ones were the only ones who lost $...this time around

Ron

Sorry guys, but I lost on this one, till I get the alert and made the sell the stock went down to 6.40, in general, it was going down very quickly, the volumes were really lows right after the laert arrived.

Jamal

Well done on sitting tight after that 6.55 pullback....I would have got faked out and sold for a small profit and not held until the 7ish.

That was an awesome exit by the way, you pretty much got all the upside potential!

Timothy Sykes

Just gotta anticipate moves, when it failed to hold the key $7 level--even when it looked like it might not hold it instead of spiking like I wanted, I got out, learn to trade quicker guys

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TIM Trades

View All

Date	Stock	Buy	Sell	Net
Nov 6	QXM	$4.31	$4.80	$1936
Nov 4	COT	$8.66	$8.88	$642
Nov 4	QXM	$4.61	$4.89	$822
Oct 30	DDRX	$25.70	$26.53	$812
Oct 29	CTDC	$4.00	$4.42	$781
Oct 26	AWSL	$3.24	$4.10	$2516
Oct 23	RODM	$5.27	$5.23	$301
Oct 22	AMLM	$2.69	$2.97	$820
Oct 22	USEG	$6.12	$6.09	$85
Oct 20	CBOU	$8.93	$9.06	$243
Oct 16	VRMLQ	$16.79	$18.65	$2773
Oct 13	YONG	$11.05	$11.66	$1202
Oct 13	NPHC	$0.59	$0.71	$583
Oct 12	IMGG	$0.60	$0.70	$682
Oct 9	ZAGG	$5.50	$6.10	$2380
Oct 7	GVBP	$0.03	$0.27	$702
Oct 1	NPHC	$0.70	$0.85	$1482

Total: $92,304 (644%)