Starbucks Corp. (SBUX) and Howard Schultz are attracting a lot of media attention today. Prices for the shares of this iconic brand are down this morning as traders and maybe algorithms are selling. Let's look past the noise and see what the indicators were doing heading into today.
In the daily bar chart of SBUX, below, we can see that prices in the past month traded mostly between the declining 50-day moving average line and the slightly rising 200-day line. The daily On-Balance-Volume (OBV) line has been slipping lower the past two months and suggests that sellers have been quietly more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator moved below the zero line in early May for an outright sell signal.
In the weekly bar chart of SBUX, below, we can see that prices have made a triangle-like pattern the past five months. Today's decline (not shown on the chart) looks like it will be a downside breakout for SBUX. The weekly OBV line has weakened the past two months and the MACD oscillator is barely above the zero line.
In this Point and Figure chart of SBUX, below, we can see a downside price target of $52 being projected.
Bottom line: Will the recent training day and less involvement in the running of SBUX by Schultz be noise or signs of something more important? I do not know. Right now prices are showing weakness and a retest of the February low and possibly the August low around $53 is the risk right now.
