• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Jitters in Starbucks Shares Appear to Be Over

The coffee merchant's charts indicate the decline in its stock has slowed and that a new uptrend could be at hand.
By BRUCE KAMICH
Nov 01, 2019 | 09:24 AM EDT
Stocks quotes in this article: SBUX

The narrative of the stock market hasn't changed, Jim Cramer assured his "Mad Money" viewers Thursday, but the prices you have to pay for it certainly have. Fortunately, savvy investors may have used Thursday's weakness as a buying opportunity. Think of it as a Halloween sale. Starbucks (SBUX) is one company Cramer cited at the top of his program that may be worth buying now.

 
Let's check out the charts while we wait in line for our double shot whatever. 
 
In this daily bar chart of SBUX, below, we can see that prices have corrected lower the past two months. Prices are below the declining 50-day moving average line, so we know from math that the short-term trend is down. Last week prices got down near the rising 200-day moving average line and then turned back up, telling us that the longer-term uptrend was still intact.
 
The daily On-Balance-Volume (OBV) shows only a modest decline from early September but it has recently started back to the upside, telling us that buyers of SBUX are again being more aggressive. The 12-day price momentum indicator in the lower panel is showing a bullish divergence as it has been making higher lows from September to October while prices made lower lows. This difference in the indicator versus the price action tells us that the decline has slowed and this can foreshadow a new uptrend.  
 
 
In this weekly bar chart of SBUX, below, we can see a positive picture. It looks like prices have successfully tested the rising 40-week moving average line. The weekly OBV line has turned flat or neutral after a decline in September. The slow stochastic indicator shows that prices are very oversold and that can make them sensitive to new buying. An oversold reading with a reversal pattern can often mark a low or turning point.  
 
 
In this Point and Figure chart of SBUX, below, we can see that prices have reached a downside price target. We also see that a trade at $87.32 or higher could improve this chart and prompt further buying.  
 
 
Bottom line strategy: It looks like the correction in SBUX is over, so traders could probe the long side of SBUX at current levels risking below $81.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Consumer | Food & Staples Retail | Restaurants | Consumer Staples | Mad Money

More from Stocks

Costco: Are We Witnessing a Bull Trap?

Bruce Kamich
Oct 3, 2023 1:08 PM EDT

When one of the last holdouts of the S&P 500 turns down the selloff is in full gear.

Chasing Alpha With Alphabet

Ed Ponsi
Oct 3, 2023 12:35 PM EDT

I'm not the only one who likes the tech behemoth. Bill Ackman believes Alphabet will be a leader in AI for years to come.

Looking for Capitulation? Don't Be Fooled by Minor Market Bounces

James "Rev Shark" DePorre
Oct 3, 2023 11:45 AM EDT

The market is trying to discount the impact of higher rates, but it's extremely difficult.

The Trickiest Stock in the Market

Stephen Guilfoyle
Oct 3, 2023 11:15 AM EDT

There's a lot to like about this name, but a lot that also sows the seeds of caution.

Is Akamai Facing a Downside Reversal?

Bruce Kamich
Oct 3, 2023 10:30 AM EDT

Or, will the stock keep climbing? Let's check.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:13 PM EDT BRUCE KAMICH

    8 Trading Rules from T. T. Hoyne

    You just read the header for this missive and prob...
  • 08:42 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How Elite Traders Make Big Profits
  • 02:58 PM EDT BRUCE KAMICH

    Classic Trading Rules From Bernard Baruch

    Bernard Baruch listed the rules (below) in his aut...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login