The Starbucks stock (NASDAQ: SBUX) opened with a negative gap on Friday, but hit support slightly above the 108.80 barrier, marked by the low of May 19th, and then it rebounded somewhat. Overall, the stock is trading below the prior upside support line drawn from the low of August 20th, 2020, as well as below a newly established downside line taken from the peak of April 19th. This paints a somewhat negative picture, but before we get confident on more declines, we would like to see a decisive dip below 108.80.
A clear break below 108.80 would confirm a forthcoming lower low on the daily chart and may see scope for declines towards the low of March 25th, at 104.00. A corrective bounce could be possible from near that zone, but if investors are still not overly interest in this stock, another slide may be possible. A dip below 104.00 could extend the fall towards the psychological round figure of 100.00, which is also the low of February 23rd.
Taking a look at our short-term oscillators, we see that the RSI declined, but hit support at 30 and rebounded somewhat, while the MACD remains below both its zero and trigger lines. Both indicators detect strong downside speed, but the fact that the RSI rebounded makes us careful of a possible recovery before the next leg south, perhaps for the stock to test once again the downside line drawn from the high of April 19th.
In order to start examining whether the outlook has turned positive again, we would like to see the share price climbing above 116.15, a resistance marked by the high of May 10th. This would also take the stock above both of the aforementioned diagonal lines and may encourage participants to target the record peak of 118.97, hit on April 19th. If that level is overlooked as well, then investors will enter unchartered territory, with the next numbers to consider as possible resistance areas being the psychological 120.00 and 125.00.
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