Boulder Brands, Inc. (NASDAQ: BDBD) was the top winner of our daily “Market Winners and Losers” earlier today as the stock was up 16%. That was at 10:48. Now shortly after 1:00 PM EST we have the stock actually trading down in negative territory. This may sound a bit crass, but this is sort of trading pattern is what technicians would call a classic gap and crap (G&C hereafter) trading pattern. This company is one of the winners of the move into gluten-free products and investors who do not know this company will probably remember it by the old name of Smart Balance, Inc. which traded under the stock ticker of “SMBL” until the start of 2013.

New investors need to know that short sellers are all over Boulder Brands like a fly on stink.

For a G&C to come about, it requires a large pop at the open, followed by what is almost an immediate selling wave. Generally this occurs when news sounded better than it really was. Maybe investors are also just wanting to lock in profits, or maybe short sellers decide to pounce on the stock now that a big price gap up has been seen. After looking at the latest NASDAQ short interest, this is not just heavily shorted. It is a severe short interest stock with some 8.77 million shares being classified as short and that is a whopping 30.5 days to cover.

Shares opened at $10.58, up almost 10% from the $9.63 close on Wednesday, and the initial move brought in the chasers and possible short sellers covering their position taking the stock up to $11.72 within the first 30 minutes of trading.

Now the stock is negative and down 4% at $9.25 so far today. Boulder Brands is a true G&C trading stock on Thursday. Its 52-week range is $4.90 to $13.99 and the trading volume of 4.55 million shares mid-day compares to an average daily volume of about 520,000 shares.

What drove Boulder Brands higher was that its earnings were $0.06 per share versus the $0.05 estimate and guidance was for sales in 2013 of $450 to $460 million versus a consensus of about $454.5 million. Also for 2013, Boulder Brands said that total net sales growth in Natural will be 57% to 62% and its organic net sales growth in Natural will be 25% to 30%.

The company said that since adding Udi’s and Glutino brands to its portfolio, retailers have accepted an incremental 660 Udi’s & Glutino items. You may know this company by the brand name Smart Balance and Earth Balance, Natural, and Bestlife brand products.

The move into Gluten-free products has been growing rapidly. That does not mean that short sellers will not pounce on a trend as many view these things as a fad. Investors have chased things like Atkins, corn, beef around Mad Cow scares, and many other trends that have been considered as fads up and down.

This stock is down so far in 2013 while the broader market is much higher. The short sellers are out for blood. This was one of the more unusual G&C trades we have seen.

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