When we looked at SBUX on Dec. 10 I wrote that, "I prefer to grind and brew my own single origin coffee at home but obviously many, many more people prefer Starbucks. The charts are bullish and traders could go long on any dip towards $100 risking a close below $95."
Let's check on the charts again.
In the daily bar chart of SBUX, below, we can see that the shares have moved higher from our Dec. 10 review. Unfortunately, there was a late January shakeout that would have stopped out our recommendation. Prices rallied back and made new highs in March. SBUX entered April trading above the 50-day moving average line. The slope of the 200-day average is positive.
The On-Balance-Volume (OBV) line has moved lower the months of February and March and that is a bearish divergence when compared to prices moving higher. The OBV line did not confirm the price gains. The 12-day price momentum study shows lower highs from February into March which tells us that the pace of the price advance is slowing and this too is a bearish divergence.