Background: SBUX Starbucks Corporation Services | Specialty Eateries | USA
Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices, and bottled water. The company's store additionally provides fresh food, snack offerings, various food products, such as pastries, and breakfast sandwiches and lunch items.
Nearest Competitors by service and market cap:
Panera Bread Company (PNRA)
Papa Johns Intl Inc (PZZA)
Both of these are above their respective 20 MA on monthly though in an area where major tops could be formed (see charts below)
Summary of Technicals:
Monthly Chart –
1. SBUX might have formed larger 5 waves with the 5th commencing from 2009 low and it appears to be an expanding ending diagonal of 3-3-3-3-3 construction. MACD has already crossed bearishly following a top in Oct 2015 with RSI also looking to continue the down trend.
2. The initial decline appears to be Expanding Leading diagonal and congesting at 20 MA on monthly.
3. If above is correct we could see possible downside to $42 in due course.
Weekly Chart –
4. Price under 20 & 50 MAs crossed bearishly.
5. After the initial decline it is congesting in possible triangle which could complete around $57. Anticipate resumption of down trend upon completion
Daily Chart -
1. Clearly under 20, 50 and 200 MA which are aligned bearishly and the attempting bounce should fail around $57 - $58 zone where 200 MA could become resistance
Conclusion:
After a major 5 wave cycle completion over several decades it is likely to spend considerable time retracing and initial target of $42 is very achievable.
Action: Could consider either buying just PUT OR a PUT spreads as detailed below
PUT Spread Trade - Not recommended as if we potentially catch reversal then spread would not be advantageous. But we could review that nearer the time.
Single leg: Jan 2017 PUT with strike price of $47.5 being quoted at $0.73 - $0.78
If price bounces to $57 area, a fill around $0.50 or better would be preferred otherwise can work the order around $0.60.
Upon a drop to $50 would value options around $2.0+ and at $45 it might be worth $4.5 approx
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices, and bottled water. The company's store additionally provides fresh food, snack offerings, various food products, such as pastries, and breakfast sandwiches and lunch items.
Nearest Competitors by service and market cap:
Panera Bread Company (PNRA)
Papa Johns Intl Inc (PZZA)
Both of these are above their respective 20 MA on monthly though in an area where major tops could be formed (see charts below)
Summary of Technicals:
Monthly Chart –
1. SBUX might have formed larger 5 waves with the 5th commencing from 2009 low and it appears to be an expanding ending diagonal of 3-3-3-3-3 construction. MACD has already crossed bearishly following a top in Oct 2015 with RSI also looking to continue the down trend.
2. The initial decline appears to be Expanding Leading diagonal and congesting at 20 MA on monthly.
3. If above is correct we could see possible downside to $42 in due course.
Weekly Chart –
4. Price under 20 & 50 MAs crossed bearishly.
5. After the initial decline it is congesting in possible triangle which could complete around $57. Anticipate resumption of down trend upon completion
Daily Chart -
1. Clearly under 20, 50 and 200 MA which are aligned bearishly and the attempting bounce should fail around $57 - $58 zone where 200 MA could become resistance
Conclusion:
After a major 5 wave cycle completion over several decades it is likely to spend considerable time retracing and initial target of $42 is very achievable.
Action: Could consider either buying just PUT OR a PUT spreads as detailed below
PUT Spread Trade - Not recommended as if we potentially catch reversal then spread would not be advantageous. But we could review that nearer the time.
Single leg: Jan 2017 PUT with strike price of $47.5 being quoted at $0.73 - $0.78
If price bounces to $57 area, a fill around $0.50 or better would be preferred otherwise can work the order around $0.60.
Upon a drop to $50 would value options around $2.0+ and at $45 it might be worth $4.5 approx
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
