Technical Analysis – Starbucks stock leaps higher after earnings beat
Share price jumps more than 10%, hits 200-day SMA
But formation of doji candlestick raises doubts about new uptrend
Starbucks stock shot higher on Thursday, opening with a gap higher, after the company reported much stronger-than-expected earnings results for the third quarter. The jump has taken the price above all the simple moving averages (SMA). However, the move above the 200-day SMA is looking a bit shaky as a doji candlestick appears to be forming.
Nevertheless, the near-term momentum remains bullish as the RSI is pointing up and about to enter the overbought region, while the MACD has just turned positive.
If the stock is able to stretch its advance in the coming days, the next target is the 50% Fibonacci retracement of the May-October downleg at 102.24. Higher up, the 61.8% Fibonacci of 105.34 will be crucial for shifting the medium-term outlook to positive too. After that, the bulls will likely turn their attention on the 108 level, which acted as resistance back in May.
However, if today’s upside runs out of steam, there could be immediate support at the 38.2% Fibonacci of 99.14 before the 100-day SMA comes into scope at just above the 97.0 handle. A steeper selloff would test the 23.6% Fibonacci of 95.31, while even lower, the 50- and 20-day SMAs at 94.12 and 93.33, respectively, could halt further declines.
In brief, the short-term picture has dramatically turned bullish, though for the medium-term outlook to also become more positive, the price would ideally need to reach the 61.8% Fibo.Related Assets
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