Through TheFLY's Eyes: Starbucks Corporation
from Theflyonthewall.com














Starbucks has once again shown itself to be as perky technically as are its products. After a sell-off after hours last night the stock has bounced back and is now up over 4%.

A quick look at the chart shows the stock bullishly breaking out (horizontal dashed red line) at the beginning of February. After having meandered in a fairly wide range the stock established a new uptrend line which has held on every test. It also took out a potential downtrending resistance line on today's move.

All that said the next test is whether the stock can take out its old high at $39.50. A failure to do that relatively soon suggests the stock may have to "digest" recent gains, moving once again in a sideways pattern until another catalyst emerges to push the stock one way or another. One way to measure this is to look ahead at the uptrend line (green dashed line) and see where price intersects it in time. What appears to be the case here is that the stock has to take out that prior high by the end of June/early July in order to stay in the current uptrend. If it does not it will break that line through a combination of price and time which will call the uptrend into question.

Chart created with Equis MetaStock