The Fall Of Starbuck’s Stock

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The Fall Of Starbuck’s Stock

By Justin DiPietro on February 24, 2009 | More Posts By Justin DiPietro | Author's Website

As soon as I touched land in Beijing, I headed to the closest Starbucks (SBUX) to enjoy a cinnamon spice mocha. While it was great to have a sip of the heaven from an expanding global company, when looking at the technicals of Starbucks for a buy, count me out. Starbucks has a multi-month resistance trend line that has been tested over three times, along with over five separate lower highs signaling an extremely bearish stock. The stock is now forming what technical analysts call a Rising Wedge Pattern. This pattern is bearish and is signaling further downside risk. Starbucks may break to the downside within a few trading days. However, it does have a short term risk of touching upwards of around $11 before it continues on its downward trend (see second chart).

Look at the comments section as I will be posting updates on this trade.

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Disclosure: None

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