The Starbucks stock (NASDAQ: SBUX) moved in a consolidative manner yesterday, staying near the middle of the sideways range that it has been trading in since December 4th, between the psychological round figure of 100.00 and the stock’s record high of 107.47. Although within a sideways range, in the bigger picture, the stock continues to balance above an upside support line drawn from the low of July 14th, and thus, we would consider the near-term outlook to be cautiously positive.
Today, after the US closing bell, the firm reports its earnings results for Q1 FY 2021, with expectations pointing to an EPS of USD 0.55 on USD 6.9bn revenue, which is lower than the USD 0.79 a year ago. Starbucks delivered better-than-expected results for Q4 in October and forecasted a faster-than-expected recovery from the coronavirus crisis. Back then, the company reported an EPS of 0.51. Thus, it would be interesting to see whether the actual prints will beat market consensus this time as well, and how the stock will react.
Another round of better-than-anticipated results may encourage investors to target again for the stock’s record high of 107.47, hit on January 4th. This is the upper end of the pre-mentioned range. However, in order for more investors to be interested in this stock a break above that high may be needed. A move into uncharted territory may signal the continuation of the prevailing uptrend and may set the stage for extensions towards the next psychological zone, at around 110.00.
Shifting attention to our short-term oscillators, we see that the RSI runs slightly below 50 and has just ticked down, while the MACD, although fractionally positive, lies below its trigger line and appears ready to obtain a negative sign soon. Both indicators suggest that there is lack of upside momentum and thus, for now, we would consider a possible retreat within the aforementioned range, before the next leg north, perhaps for another test near the 101.20 zone, or the round figure of 100.00.
Nonetheless, in order to turn bearish, we would like to see a dip below the 96.50 mark, as well as a break below the upside line drawn from the low of July 14th. Such a move may signal a change in the medium-term trend and may initially allow declines towards the low of November 12th, at 92.60, or towards the 91.20 territory which acted as a very strong resistance between October 12th and November 6th. Another break, below 91.20, may extend the fall towards the 85.45 area, defined as a support by the lows of October 30th and November 2nd.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2021 JFD Group Ltd.