Yesterday was the fourth day of the started correction of the rampant Javalution Coffee Co (PINK:JCOF). The company which brought along a dazzling appreciation in the last month seems to have entered a profit taking period that drove the price downwards despite the recently issued announcements.
The fatal Friday 13 was the day when the stock reached both a new 52-week high at $0.7 and started to feel the overwhelming pressure of sellers. On that day, JCOF touched the $0.46 line but closed back at $0.6. However, the following days the selling pressure continued and for a while the 0.46 line was broken through.
Now that a bearish period seems to form for JCOF, the most essential question is where the stock is heading. Moving averages can give some guiding light in this regard. At present, the 50-MA is at $0.16 but the stronger 200-MA is at $0.1. However, the DMI indicator shows that buyers are still stronger than sellers, so it is not certain if the market forces will manage to drive the stock price back at the long term MA levels. [BANNER]
Meanwhile, the company announced it had achieved some progress with its efforts to penetrate the South Florida food service market. JCOF stated that it had started to distribute in the high volume Latino espresso market with three different private label programs. The news brought some optimistic air on the market and caused JCOF to rise 8%, but the next day the decline continued.
In sum, the hype around JCOF, which was stimulated by the global coffee prices, had increased the company’s market capitalization to $70 million. Whether this valuation is justifiable or not will be shown by the power of the downward curve that started with the sobering of the market.
