Stock of the day: Starbucks

Today, I invite you to enjoy your coffee while reading this analysis on Starbucks, which, as you know, is kind of connected with the coffee business 😉 It’s not the first time that we mention this instrument. We did so on July 5^th when the price was around 114 USD. Back then, we were bullish, saying:

“The last two sessions were really great for the shareholders here as the price broke the horizontal resistance on the 113 USD and came back above the long-term up trendline (blue). As long as we stay above those two, the sentiment is positive.”

That worked out pretty well because the price went higher and by the end of July, had set new highs at 126 USD. That was it though. 126 USD was the mark where the correction started. It’s not just a random correction but one creating a head and right shoulder of the H&S formation (yellow). And this is where it gets complicated.

At the end of October, the price managed to break the neckline (red) of this pattern, which gave a proper sell signal. The thing is, after a few days, we can now say that this signal was fake! The price managed to climb back above the neckline, cancelling the H&S pattern.

With all this said and done, we’re back into green territory and the buy signal stays here. As long as we remain above the neckline.