Is StarBux a buy?

To look at the weekly chart at first glance I would say yes, but after further review, I might just wait to see if the buyers are really there.

First is the S&P going up or in an uptrend? Yes

Second, the Sector is Services and is ranked 3rd out of 12, that is good.

Third, Industrial Group is Restaurants and is ranked 14 out of 25, so, so.

Now to the weekly chart. Is there any overhead in the last 2 years to deal with? Nope, so that is a good thing. Is it above the 30 week ma? yes. So overall not a bad buy, but I’m not done yet, so do not throw any money at it yet. Let’s go back in time, I marked the entry point. I also marked every stop loss to capture the gain. Without going into to much detail, after the last stop loss, E, you would have been stopped out around August 23rd. This would have been about a 73% profit.

Now you have to look at volume and overhead and yes you do have overhead at $28.50. The current price is $27.14. So if you look at the last 3 weekly volume bars, the last one doesn’t count yet, because we have a few days left in order to form the complete week, the volume is trailing off. This is a negative. We only need $1.86 or 5% before we reach the breakout point. I would wait and see if the volume builds and we breakout at the same time before I pull the trigger. Given that it needs a 5% rise in order to get there, it should give you enough time to see if volume builds.

Conclusion, I think the immediate overhead, volume, and the need for a breakout is what would make me pause. How do we not know that current owners of SBUX are not getting ready to take their 73% profit after riding it for the last 18 months?

I would buy CMG before I bought SBUX if I had to spend the money today. This post is for you Spot.