Starbucks Corp: Will the SBUX Stock Bounce Towards the $100 Mark?

• Starbucks will announce its Q4-2023 report on November 4, 2023.
• SBUX stock closed at $91.95, with a loss of 1.32% in the pre-market trading.
• The SBUX stock price was down about 8.47% over the past month.

Starbucks Corporation (NASDAQ: SBUX) stock closed at $91.95 while witnessing a decline of 1.32% in the past intraday session. It was down roughly 8% over the past month due to the vigorous presence of sellers in the market. The stock price is currently challenging the 20-day EMA. It is retracing towards the previous resistance level of $97.30.

The SBUX stock price was up by 2.29% according to the weekly return, indicating a slight strength with a short-term pullback. However, the bullish move elevated the price near the short-term exponential moving average. If the bullish sentiment sustains and the price moves above the 50-day EMA, it might retest the 100-day EMA. 

In a larger timeframe, the SBUX stock price has been experiencing a long march of bears since May 2023. On May 1, 2023, the SBUX stock price broke above the $115 mark and was up over 15% year-to-date (YTD). Fast forward to today, the stock price is down by 8.56%, according to the year-to-date return. 

For the past 5 months, the SBUX stock price witnessed continuous pressure from the bearish side. The price dropped after forming a solid resistance at $103 while forming multiple lower lows. If the sellers’ dominance remains constant and the price melts below the annual low of $89.21, it might drop further towards the $87 mark.

Why is the Starbucks (SBUX) Stock Price Falling?

There are several factors affecting the downfall of SBUX’s stock price. However, the first quarter financial report release significantly triggered the negative sentiment. Hence, SBUX stock lost gains and shifted downward from the $115 resistance level.

Will the Bearish Sentiment Remain Constant?

On the daily chart, the SBUX stock price is trading close to the 20-day EMA and aiming to retest the round figure of $100. Moreover, the chart signals that SBUX stock is close to the demand zone and might bounce back soon. However, in order to rebound, bulls have to attain strong momentum. Otherwise, the bearish sentiment will lead to a further selloff. 

The relative strength index (RSI) has been hovering below the 50-neutral zone since August 30, 2023. Hence, the RSI is at 41.71, suggesting slight weakness and bearish dominance, making it difficult for the price to sustain at higher levels. 

Conclusion 

Starbucks (SBUX) stock’s market structure and price action have turned bullish after the price bounced from the annual low of $89.21. The price is close to the 20-day EMA. It means that the SBUX stock is near the demand zone and might bounce back soon. 

However, technical parameters favor the sellers’ side. Meanwhile, the analyst ratings favor the buyers’ side. It is a good investment opportunity as the stock price is at a year-to-date low.

Technical Levels 

Major resistance: $110.83 and $115.48

Major support: $93.71 and $89.21 

Disclaimer

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