STOCKS: Krispy Kreme Poised For New Highs

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Krispy Kreme Donuts (KKD) has been in a multi-year consolidation and is finally getting some frosting for new highs.

GAP REVIEW

On November 20, 2012, KKD gapped up on earning guidance. KKD pushed through prior supply over $8.75. If KKD can maintain this gap up, it should start to lift into higher prices.

KEY LEVEL

Any price move maintained over $9.50 is considered bullish. KKD may try to revisit its previous highs around $10.00 and even into $13.00.

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THE TRADE

Two possible entry ideas:
1) Watch for a pullback into daily demand at $8.50. Keep a tight stop under $8.00 and look for it to build demand to climb over $9.50.
2) Buy any price action over $9.50. Look for targets into $10.00 and then $13.00.

[Editor's note: Peterson has been on a winning streak lately for his stock picks, most recently nailing a Yahoo trade. Learn more about his trading approach here. Do you trade gaps? If you've got questions or comments for Peterson post a comment below.]

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Read more trading ideas here in our daily Markets section.

Strategy article: Learn how to profit from the opening gap.

2 Comments

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TroyPeterson: Good question I work on teaching them how to read Supply/Resistance and Demand/Support if you go those concepts down your off to a good start. Just work on reading where the buyers are located and where the sellers are located and follow. I teach traders to use prior price action as a leading indicator.
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KiraBrecht: Troy, you've really been making some great calls lately. Kudos. I know you are trading mentor also. When you work with beginning traders, what are the one or two most important pieces of guidance, wisdom or advice that you give to them?
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About the Author

Troy Peterson is the president of Gap Edge Trading and where he coaches and mentors traders to have an edge in trading stocks with a focus on Gaps.  He daily moderates the Gap Trading Room and teaches an Online seminar on "How to Day Trade Gaps" and Swing Trade Gaps. And also administrates a Swing Trading Newsletter solely based off of Trading Gaps.  Follow him on Twitter at @troypeterson

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