Starbucks Gearing up for a Major Move after Q3 Results Settled

Aug 23, 2012 -

Revisiting Starbucks


Just after Starbucks' Q3 earnings release, in one day we saw a drop of about 11% in their stock. The days following weren't any easier on the stock as it continued its downtrend. It soon fell to January 2012 levels of approximately $44/share. This also signified a dip just below the fifty day moving average. In the past three years, under the weekly view, it has only touched this two other times! What does this tell you about the stock? 

Despite the stock dipping below the 50 day moving average, it still looks very healthy. This week's volume has been weak and that is a good sign for bulls. 

Starbucks Weekly Chart (Last 3 Years Time)


Below you will see the daily chart. What do you notice? There is a gap between just under $50 to about $48. More times than not these gaps are eventually filled. For example, about a month ago, we looked at the Bed, Bath, and Beyond chart and there was a huge gap. What happened to it now? It's starting to get filled. But, I digress.

What we can see in the chart below is that there is declining volume in the last two weeks and the stock chart has formed a flag. Whether or not it breaks up or breaks down remains to be seen. But, don't be surprised if it makes a move somewhere soon.

Starbucks Daily Chart (Last 6 Months Time)

Disclaimer: This article is written for informational purposes only and isn't intended to be investment advice.
Disclosure: I am long SBUX
 
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