Investing.com - Financial Markets Worldwide

SBUX: Critical Support Seen

ByFrank Kollar
Published 07/31/2012, 03:19 PM
NDX
-3.76%
SBUX
-7.02%
PP4A
-1.19%

Starbucks Corp (NASDAQ: SBUX) has pulled back over 27%
from its prior April highs. Is it a good time to buy the popular company's
stock, or are lower lows still ahead?

Starbucks is the leading fresh coffee and specialty coffee brewer that also sells high quality, whole coffee beans and coffee-related equipment.

The company's stock has had a good run but its last quarterly earnings
report, with numbers reflecting the period ending on July 1, hit the stock hard.

When the report was released at .43 cents per share -- .03 cents lower than expected plus a fiscal outlook well below Wall Street's expectations -- the stock dropped 11% the following day as several analysts lowered their outlooks.
SBUX
Critical Level
Technically, the stock is now at a critical support level. Should SBUX close decisively below $45.38 -- the 61.8% retracement support level for the entire October 2011 to April 2012 advance -- we would expect to see the stock move lower still.

How low? The $38.72 level is the likely target if there is a break of support.

On the other hand, should SBUX reverse at the $45.38 level and move higher, there would be a case for a bullish trade using a sell stop below the support level.

Shortly before Tuesday's close, SBUX was trading at $45.28.

The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy does not have a position in Starbucks

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