Starbucks Corporation (NASDAQ: SBUX) analysts have been active ahead of the company’s fourth-quarter 2021 earnings print scheduled for Oct. 28 after the markets close. They can’t seem to agree on the stock’s value, however.
On Oct. 11, Deutsche Bank analyst Brian Mullan upgraded Starbucks from Hold to Buy with a $127 price target. BofA Securities analyst Sara Senatore resumed coverage on Starbucks with a Buy rating and a $135 price target. Morgan Stanley is less bullish on Starbucks and on Wednesday maintained Equal-Weight and lowered the price target to $124.
Starbucks is trading far below all three analyst’s estimates near the $112 level, but has recently created a bullish pattern on the daily chart.
The Starbucks Chart: Starbucks began trading in a downtrend on Sept. 10, after reaching a high of $120.83. The stock found a bottom on Oct. 6 at the $109.48 level and bounced slightly up before falling back down to retest the level as support on Wednesday.
The retest of the level created a bullish double bottom pattern and on Thursday Starbucks reacted to the pattern and bounced up about 1.5% higher. The bounce has allowed Starbucks to print a bullish Marubozu candlestick, which may indicate higher prices are in the cards for Friday.
Starbucks is trading sideways in a consolidation pattern between the $109.48 and $113.86 levels. For Starbucks to make a bullish trend change, the stock will need to print a higher high above the Oct. 11 high of $113.65.
Starbucks is pinned between the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, which indicates indecision. On Thursday Starbucks regained the support of the 200-day simple moving average and if the stock can close the trading day above the level, it will indicate overall sentiment has turned bullish.
Bulls want to see big bullish volume come in and drive Starbucks up over resistance at the $113.86 level, which will push the stock into an uptrend. Above the level, Starbucks has resistance at $117.57 and $120.83.
Bears want to see big bearish volume come in and push Starbucks back down toward $111.05. If the stock can’t hold the level as support it could retrace to the $109.50 level. If shares were unable to hold the double bottom level as support, it would indicate a new downtrend is beginning.
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