Chart of the Week: Starbucks
Good morning everyone. Happy Wednesday. It’s time for our chart of the week, and this week we’re gonna be focusing on Starbucks; SBUX is the symbol. Let’s take a look at this chart here. It’s starting to look a lot better than it did back earlier in the year.
As you recall, Starbucks replaced their CEO back in the middle part of August. And you can see the stock jumped higher on that news, from about the mid $70s all the way up to the mid $90s. And the stock was in an enormous downtrend for months after reaching a high back in the early part of 2024.
It’s been making lower highs and lower lows all the way down. Had a terrible quarter in the first quarter. And it dropped sharply over here. Couldn’t rebound. But finally, it did rebound once they replaced their CEO. And so we wanted to see how well the stock was going to perform with the new CEO in there, Brian Niccol, who came from Chipotle.
We kind of have a moderate looking base over here. This stock has really broke out of a nice flat base – flat to sort of upward-sloping base – on Monday the 11th on some good volume. You can see the volume bars over here, which have been really improved over the past couple of weeks.
We see good strong money flow down here on the bottom. Even though it’s been coming down from the time the CEO took over, it’s still positive money flow.
MACD is starting to turn up on a bullish signal. You can see that right there.
And then finally – you know, look relative strength. This is the one thing that’s helping the stock hang in there right now. Good relative strength versus the rest of the market.
Now as we know the market’s been making all-time highs, and obviously Starbucks is well off an all-time high, but still – good relative strength for a stock that’s been posting poor earnings number for the past couple of quarters. They had really poor earnings reported last month but still managed to bounce right back. You can see this big bar right over here. It came down hard after earnings were reported and its bouncing right back up and making new highs that it hadn’t seen since February or March of this year – so seven, eight month highs.
I think it’s got a chance to get past this $104 – 106 level in pretty short order here. And then into the new year in 2025, we think that Starbucks has got some room maybe to the $125 – 130 area.
Take a look at Starbucks. It’s not going to be your fastest mover. It’s not a tech name obviously. But certainly if the economy stays strong and we see some improvement in the restaurant group, Starbucks is going to be one of the big beneficiaries of that improvement.
So that’s Starbucks; SBUX.
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