SBUX breaks below Thursday's low
Starbucks Corporation (SBUX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
SBUX finished the week 4.67% higher at 77.62 after losing $0.43 (-0.55%) today, underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 77.89, Starbucks confirmed its breakout through the previous session low after trading up to $1.37 below it intraday.
Daily Candlestick Chart (SBUX as at May 22, 2020):
Friday's trading range has been $1.53 (1.96%), that's below the last trading month's daily average range of $2.05. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SBUX.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on April 24th, SBUX actually gained 2.86% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the nearby swing high at 79.38 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 75.76 where further sell stops could get activated. Trading close to March's high at 82.62 we might see further upside momentum if potential buy stops at the level get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Starbucks. Out of 377 times, SBUX closed higher 55.44% 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 62.86% with an average market move of 0.93%.