Starbucks Corporation (NASDAQ:SBUX) negated its uptrend on Friday and fell below a key support level at $90.96, forced down by the S&P 500, which gapped almost 1% off Thursday’s close.
More than 100 of the 9,000 corporate-owned Starbucks locations in the U.S. have now filed to unionize, after a Buffalo store became the first to win a vote to unionize in December, according to a report from The Washinton Post. The movement is being led by women, nonbinary people, queer women, and women of color.
The effort to unionize has been met with high levels of corporate opposition but as more locations have voted in favor of unionization, the sweeping movement has gained momentum.
Starbucks’ stock hasn't appeared to react positively or negatively to unionization headlines so far, however, and although the stock is trading in a downtrend, Starbucks is showing signs a bounce may be in the cards for the short-term.
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The Starbucks Chart: When Starbucks fell below the March 1 low-of-day the uptrend was negated but the stock is holding within a rising channel pattern on the daily chart. A rising channel is considered to be bullish unless the stock breaks down bearishly from the lower ascending trendline of the pattern on higher-than-average volume.
- Just before midday on Friday, Starbucks looked to be printing a hammer candlestick on the daily chart, which indicates the stock may trade higher on Monday. If the stock trades higher, bearish traders could watch for an entry if Starbucks rejects from the upper ascending trendline of the pattern over the coming days.
- On Feb. 23, Starbucks closed a lower gap on its chart between $91.20 and $92.66, which may give bullish traders more confidence going forward because gaps on charts fill about 90% of the time. Starbucks has an upper gap, which the stock is also likely to trade back up toward that is between the $117.47 and $118.36 range.
- The move lower on Friday came on lower-than-average volume, which indicates the stock may be running out of sellers. By midday only about 2.34 million shares had exchanged hands compared to the 10-day average of 8.04 million shares.
- Starbucks has resistance above at $90.96 and $93.53 and support below at $86.81 and $82.37.
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