Outside tech, investors can find stocks that remain constructive. Starbucks (SBUX) is trying to be one of them.
We’ll find out what it’s truly made of when the coffee-bar giant reports earnings after the close on Thursday.
The company has gone through some leadership changes in 2022: Former CEO Howard Schultz earlier this year took the helm on an interim basis, and the company then named a new chief, Laxman Narasimhan..
When we last heard from the company during its investor day in mid-September, Starbucks raised its earnings growth forecast for the next three years.
That’s pretty impressive given that investors are prepping for a potential global recession in the months and quarters to come.
When the company reports its fiscal-fourth-quarter results tonight, investors will want to know that the chain is still on track to hit its goals (here’s the full earnings preview from TheStreet's Martin Baccardax).
As for the stock price, the shares are wavering but have largely held up. Let’s revisit the chart.
Earnings Preview for Starbucks Stock
Chart courtesy of TrendSpider.com
Starbucks stock in September was doing a great job bucking the trend, as it pushed to multimonth highs amid general market weakness.
After rallying for eight straight weeks, the shares endured a much-needed three-week decline, allowing them to reset and push into the mid-$90s.
Since then, the situation is a little less clear.
While Starbucks stocks did avoid making new lows in October (unlike the major U.S. indexes), it failed to reclaim the 200-week and 50-week moving averages, while the latter continues to act as active resistance.
Support is showing up in the $82.50 region, along with the 21-week moving average.
If this level fails as support, the bulls can look for support in the $80 to $81 region, where it finds prior resistance and the 50% retracement. Below that puts $78 in play, which is the 61.8% retracement.
If all these levels fail, we must turn our attention to the low-$70s, which has been notable support over the past few years.
On the upside, it’s pretty simple. Starbucks stock must clear the declining 50-week moving average if the bulls want to see a sustained upside rally.
Above that puts $91 in play, followed by $93.50, then $100.
