Peet's Coffee & Tea

PEET

Company. Peet's is a specialty coffee roaster whose "goal has been to offer the best coffees & teas in the world, without compromise. We believe that meticulous selectivity, artisan roasting, and our commitment to freshness make the difference you can taste." Peet's sells coffee through retail stores, mail order, online, specialty food and grocery stores, offices, and fine restaurants and hotels. (company website)

Buy. I bought PEET at the beginning of June when it broke free of the $23 level on a day of robust volume. It subsequently pulled back to $23 again, but then climbed to nearly $26 at the beginning of July.

At the time I bought, the directional indicators had just switched, with buying pressure (green +DI line) crossing up over selling pressure (green -DI line), and the trend was strengthening (rising black ADX line). It was also pulling away from the 50-day moving average.

Sell. When Peet's pulled back down to $23 in mid June, but started marching back upward, I thought all was well: it had briefly kissed the 50-day moving average and pulled away. This is supposed to be a good sign. And it was— PEET climbed almost to $26. But the very next day was a big sell-off. This should have been a clue! Alas, I ignored it.

A couple of weeks later I again deluded myself into thinking all was well. PEET closed back up at $25 twice. But on the second time it had also traded back down below $24 during the session. Again I ignored the omen at my peril. The very next day was another big sell-off.

PEET took a series of hits this past week, culminating in a plunge last Friday, putting it well below the 50-day moving average and stretching the lower Bollinger band down even more. Ouch! To make bad matters worse, the spread between selling pressure (red -DI line) and buying pressure (green +DI line) continued to worsen, and not in a comforting direction.

When PEET rallied a bit this morning, I decided to sell before the losses grew too much, and put the money elsewhere. I'm going to be disappointed if PEET takes off upward again, but right now it doesn't look like it.