Mouth Watering Opportunity to Profit from Krispy Kreme Doughnuts (NYSE: KKD) Technical Trade

Incase you haven’t had the pleasure of ever tasting one of those melt-in-you-mouth doughnuts, allow me to introduce the Winston-Salem, North Carolina-based Krispy Kreme (KKD). Krispy Kreme is a retailer and wholesaler of doughnuts. There are currently approximately 300 Krispy Kreme factory stores and 95 satellites operating system wide in the U.S., Australia, Canada, Hong Kong, Indonesia, Japan, Kuwait, Mexico, the Philippines, South Korea and the United Kingdom.

While the fundamentals of the company still look undesirable at best, things do seem to be improving. I point out this opportunity not as a fundamental play or investment, but strictly on a technical basis and trading opportunity. Here is a good short term entry point for those looking to make a quick buck and limit their risk. We are sitting on support right here and volume is increasing. I don’t need to draw the support line on the chart because the 50-Day SMA makes it very self evident.

Look for this bounce to come tomorrow and continue over the next couple days. The stock is relatively oversold here. These are the kind of low risk entry points that I look for when trading. What do you guys think about this one?

Also, congratulations to Mike over at CleverDude for winning our latest raffle. On a side note, Mike runs a GREAT blog that talks in detail about personal finance. Check it out! Enjoy your new book Mike!

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5 Comments - Post your comment below.

Rick Curran
Feb. 21, 2007

Hi, came across your site through 9Rules.com. I'm more of a Tim Hortons guy than Krispy Kreme!

Chad Lapa
Feb. 21, 2007

Haha - Rick, I am actually more of a Tim Horton's guy also. You just can't beat that honey glazed chicken sandwich!

Mike
Mar. 14, 2007

Hate to push it but http://finance.google.com/finance?q=KKD

Chad
Mar. 15, 2007

Mike, you are right. Totally busted trade. I got stopped out 50 cents lower after it broke resistance. The stock hesitated for a couple days there and then commandingly broke through and was off to the races lower. Remember that half the battle is making money, the other half is not losing it! Keep those stops tight and stick the game plan when you enter any trade. No excuses.

Oskar Syahbana
May. 11, 2007

I think you jumped into trade too soon. It broke many resistance level (I have to draw it by hand... not fancying MA too much). And the oversold is not really "oversold" yet because it's still above zero.

If looking on the current pattern (as of May 10th), the stock will still see some downward movement. But then again, it's all about probability and money management ;-)