Buy the Dip as Starbucks Stock Nears Bullish Trendline

The security still boasts a more than 37% year-over-year lead

Fernanda Horner

Digital Content Manager

May 23, 2023 at 2:31 PM

SBUX

Starbucks Corp (NASDAQ:SBUX) stock is down 2.4% at $100.40 at last check, as it continues to cool from its May 1, one-year high of $115.48. Though shares recently lost familiar support from the $104 region and are eyeing a third-straight daily loss, they still boast a 36.7% year-over-year lead. Plus, this pullback has positioned SBUX close to a historically bullish trendline, making now an opportune time to bet on a move higher.

More specifically, Starbucks stock is now trading near its 160-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's latest study, the equity saw three comparable signals during the past three years, and was higher one month later 67% of the time, averaging a 7.8% gain. A similar move would place the shares back above $108.

SBUX 160 Day

Short-term options traders lean bearish, indicating a shift in sentiment could generate tailwinds. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.91, which stands in the 85th percentile of annual readings.

It’s also worth noting that premiums are attractively priced at the moment. This is per SBUX's Schaeffer's Volatility Index (SVI) of 22%, which ranks in the extremely low 9th percentile of readings from the last 12 months.

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