$52.50-(A key level of support for Starbucks).

As I noted in the above chart, closing below the 100 WMA again is a troubling sign for the bulls.

I am watching the 52.50 level. If that level goes, the 200 WMA is up next at ~47.50.

The last time Starbucks fell below the 200 WMA was in 2007. It fell another 70% bottoming out around $4. Granted, that period was an extreme event and the company is more mature and in a better position today. I am in now implying it will fall 70% Just pointing out long it has been since the last move under the 200 WMA .

Now, a look toward some data.

Same store sales is slowing. See image below.

Jennifer Bartashus, an analyst at Bloomberg Intelligence notes-

“Starbucks is really starting to hit the saturation point in the U.S.,” she said. “The question with that is how are they going to continue to grow same-store sales.”

To achieve growth, it will mean growing same store sales at a better rate and pushing into new markets.

Per Bloomberg again-

"Starbucks has been trying to improve its food in the U.S. to lure more customers, especially beyond morning hours. This year, the company is adding fancier items to its menu, including Sous Vide Egg Bites and a gluten-free breakfast sandwich. To attract the on-the-go crowd, Starbucks also is expanding its snack-based meals called Bistro Boxes."

In other words, they are expanding to other categories besides coffee (line extension). They are hoping to gain a bigger share of the customer's wallet while they are in the store. Will it work or could those resources better be used elsewhere? The jury is still out.

I have no position in this stock but will be watching the levels noted on the chart closely.

Let me know what you think. Agree/disagree? Would love to hear your thoughts.

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