I know I’ve complained about this before, but it’s been a while so let me get on my soapbox again. Starbucks (SBUX) needs to up the average temperature of their hot coffee drinks. When I order a coffee specialty drink, I do not feel as if I should have to order it “extra hot”, it’s coffee!!

The older woman that successfully sued McDonalds when the lid came off her hot coffee ruined the industry. In another 2-3 years it is probable that you will need to sign a waiver or check a box when ordering coffee saying that you understand the risks of a “hot” beverage.

After making a new 52 week high several weeks back, Starbucks (SBUX) stock chart has been anything but hot. Matter of fact, its share price has shaved $11 off since making that new high.

It’s time to jump to the charts and see if temperatures are going to heat up or stay lukewarm.

Starbucks (SBUX) – Support Areas

This first chart for Starbucks (SBUX) is a 3 year weekly candlestick chart. It is an updated chart from my previous Starbucks (SBUX) full-length article. The previous article can be quickly referenced here:

“6/15/2017 – Starbucks (SBUX) Candlestick Support”

The upper gray shaded box on the below chart was a scale-in purchase area identified in the June article. The lower gray shaded box is from the current analysis and subsequent chart activity. The current gray shaded box falls directly inline with the 100% Target Line from the red Fibonacci Extension Tool. It also falls inline with the confluence of bullish candlestick patterns and their support areas.

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A breakout from its trading range is reviewed as well as price targets for both upside and downside breakouts.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] test and reach the lower gray shaded box in the next 2-4 weeks. A breach of the 100% Target Line could lead SBUX to continue towards its Golden Ratio for the current downtrend.

The Golden Ratio is a highly probable price target area. That price level is the 161.8% Target Line from the red Fibonacci Extension Tool. But given the confluence of Bullish candlesticks at the 100% Target Line, there is a chance that the Golden Ratio is not reached for the current downtrend. Maybe SBUX’s share price can find support at the 100% Target Line instead.

SBUX – Trading Range

This next chart is the same 3 year weekly chart. I’ve removed all the trendlines and wanted to look at its price activity from a different perspective. Starbucks (SBUX) share price has been in an $11 price range over the last 2 years. It is currently re-testing the bottom of the Trading Channel.

An upside or downside breakout from the Trading Channel usually travels the same width as the Trading Channel. The Trading Channel for SBUX has an $11 width. A downside breakout would place SBUX’s share price in the $42 price area. That seems like an awfully low downside price target considering the confluence of bullish candlestick patterns around the $52.50 area.

A bullish case could be made for a bounce from the bottom of the Trading Channel due to the MACD Histogram that has shown a decrease in selling momentum the last 3 weeks.

SBUX – Point & Figure Charts

Both Point & Figure charts, the Closing and the High/Low charts, reflect a bearish price objective of $42. That indicates a downside break out of the trading range identified above.

That seems a little bearish given the confluence of bullish candlestick patterns around the $52.50 price level.

SBUX – Moving Averages

This chart for Starbucks (SBUX) is a 1 year daily candlestick chart. I typically use a 1 year chart to analyze moving averages. I also placed a shorter-term Fibonacci Extension Tool on the chart to see at what price level the Golden Ratio for the current downtrend resides.

The Golden Ratio, or the 161.8% Target Line from the red Fibonacci Extension Tool, resides at $52.33, right around the bottom of the Trading Channel. The $52.50 support area identified above.

Since Starbucks has been in a consolidation for around 2 years, it may be best to wait until its share price regains control of the 200 Day moving average. That will be a sign from the moving averages that SBUX’s share price is ready to resume into an uptrend. The development of a Death Cross pattern could be an indicator of a longer consolidation or correction period for SBUX.

Starbucks (SBUX) – Summary

I guess Starbucks (SBUX) coffee is not the only thing below temperature lately. Its stock charts are also below temperature.

Its share price is at a critical moment on its stock chart.

From a bullish perspective, the confluence of candlestick patterns around the $52.50 area seems like strong support. This support area also agrees with the Golden Ratio calculated by the short-term Fibonacci Extension Tool. These items argue a strong case to make a scale-in purchase around the $52.50 price level.

However a downside breakout leaves SBUX share price heading towards the $42 price level. If the market continues to meander and not find its footing in the next week or two, it could hurt SBUX’s chances for a rebound the $52.50 price level.

If you purchase shares at the $52.50 price level and SBUX breaks below the Trading Channel on heaving selling volume, hold onto those shares until SBUX’s share price pushes back towards the bottom of the Channel. That will be the opportunity to exit the trade before the anticipate slide continues towards the $42 price area. A rebound from the bottom of the Trading Channel will most likely see resistance overhead at the 200 ay moving average. That is less than 10% higher than the current share price. Is Starbucks worth trading right now with such limited upside? I don’t think so. Not quite yet.

In summary, this is another stock that has been in a consolidation for some time and there is no need to rush into the trade at the current time. Set an alert or two and monitor its share price activity around the $52.50 price level. It may stick around that price level for another week or so to evaluate the buying and selling taking place. If you purchase shares at the $52.50 price level, you should be doing the same. Monitoring it on a daily chart.

On deck: Cyber-Security article of some sorts…

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