Medium-term technical outlook on Starbucks Corp (SBUX)

Key Levels (1 to 3 weeks)

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Pivot (key resistance): 84.94

Supports: 81.03 (trigger) & 74.80/73.70

Next resistance: 92.16

Directional Bias (1 to 3 weeks)

Bearish bias below 84.94 key medium-term pivotal resistance and a break below 81.03 reinforces the start of a multi-week corrective down move sequence to target the 74.80/73.70 support zone in the first step.

On the flipside, a clearance with a daily close above 84.94 negates the bearish tone for a rebound towards the next resistance at 92.16 (12 Sep 2019 swing high & 61.8% Fibonacci retracement of the on-going decline from 26 Jul high to 05 Nov 2019 low).

Key elements

Since its all-time of 99.73 printed on 26 Jul 2019, the share price of SBUX has declined by 18% so far and it is now testing a major ascending trendline support in place since 28 Jun 2018 low.

Also, it has traced out a series of “lower highs and lower lows” since 26 Jul 2019 that indicates the major uptrend phase from 28 Jun 2018 is at risk of transiting to a corrective down move phase.

The daily RSI oscillator has already staged a bearish breakdown from a significant support (in parallel with the price action support from 28 Jun 2018 low) and retreated from it on 18 Nov 2019. These observations suggest that medium-term downside momentum remains intact and the major uptrend phase of SBUX since 28 Jun 2018 is at risk of being damaged.

The 74.80/73.70 support zone is defined by a confluence of elements; the swing low areas of 17 Apr/29 May 2019, the lower boundary of a medium-term descending channel from 30 Aug 2019 high & a Fibonacci retracement/expansion cluster).

Relative strength analysis from its ratio charts against the market (S&P 500) and its sector (Consumer Discretionary) suggest underperformance of Starbucks (SBUX).

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DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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