Starbucks (NASDAQ:SBUX) has been selling off since it announced plans to scale back store growth while also closing under-performing urban locations. On Tuesday, SBUX closed at $57.43 a share and by Thursday, it was trading at $51 a share. Quite often when a stock plunges in this type of chart formation, it means lower prices ahead before a solid bottom is found. The retail coffee giant is now trading below its important 50-week moving average, which is another sign of weakness.
How Low?
Traders must now watch $48 as the next major support area for the stock. This level is an important Gann number and should be defended when tested.