In a special "Executive Decision" segment of Mad Money Friday night, Jim Cramer sat down with Kevin Johnson, CEO of Starbucks Corp. (SBUX) and Dara Khosrowshahi, CEO of Uber, on location at Starbucks' newest Roastery in Chelsea in New York City.
Johnson said the Roastery represents the pinnacle of all things coffee and this newest location joins three others around the globe. And Starbucks' expanded partnership with Uber is anticipated to bring the Starbucks experience right to your door. Khosrowshahi said that while many Starbucks customers love coming to locations like the Roastery, there are times when delivery can provide a lot of value. Both companies are working to integrate their technology for a seamless customer experience.
When asked about China, Johnson said that Starbucks has been in China for over 20 years and has deep respect for the people and the culture there. He said he now has a great team in place and is rebuilding a culture of respect and diversity. All well and good, but let's look at the chart and indicators and see how things have changed in the past week. We wrote about SBUX last Monday, where I wrote that "Short-term traders should avoid the long side of SBUX for the near-term as a pullback to the $62-$61.50 area is possible. Intermediate to longer-term traders should wait for a rally above $68 as their signal to go long."
In the daily bar chart of SBUX, below, we can see that prices dipped in the past week, edging closer to the rising 50-day moving average line. The slower to react 200-day line is rising and below the market around $57.
The volume of trading does not show anything out of the ordinary in the past week and the On-Balance-Volume (OBV) line is still pointed down from early November. The trend-following Moving Average Convergence Divergence (MACD) oscillator is still in a take profits mode and pointed down toward the zero line.
In the weekly bar chart of SBUX, below, we can see a mixed picture. The chart pattern looks like a bullish flag formation. Prices are still well above the rising 40-week moving average line.
The weekly OBV line suggests that sellers of SBUX have been more aggressive recently and the MACD oscillator is narrowing towards a possible take profits crossover in the weeks ahead.
In this Point and Figure chart of SBUX, below, we can see a possible downside price target of $61.80. Point and Figure price targets are like other price targets -- a guideline but not a crystal ball. A rally to $66.74 or $67.41 will strengthen the picture.
Bottom-line strategy: SBUX has inched down toward the rising 50-day moving average line. Prices may just hold that math-drive indicator and we might see SBUX resume its uptrend shortly.