SBUX breaks below key technical support level
Starbucks Corporation (SBUX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
SBUX ended the week 3.31% higher at 89.28 after losing $0.65 (-0.72%) today on low volume, notably underperforming the Nasdaq 100 (0.29%) ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SBUX as at Feb 14, 2020):
Friday's trading range has been $1.40 (1.55%), that's below the last trading month's daily average range of $1.82. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SBUX.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 89.30 (now R1), which is likely to act as resistance going forward. After having been unable to move above 90.51 in the prior session, Starbucks ran into sellers again around the same price level today, missing to move higher than 90.39. The last time this happened on February 5th, SBUX lost -1.61% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 90.51 where further buy stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Starbucks. Out of 209 times, SBUX closed higher 54.55% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 67.94% with an average market move of 1.56%.