SBUX Watch

Ubiquitous caffeine-pusher Starbucks Corp. (SBUX) is showing bull phase on a couple of major signals, suggesting at the least an upward swing in a larger sideways pattern lies ahead. The signals come after -- not in anticipation of -- earnings, and days after the ex-div drop failed to materialize.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
SBUX $25.14

The bull signals are Person's Proprietary Signal (pps) and the macd. But the technical picture is not yet a full charge toward bullish glory. The parabolic sar remains in bear phase, and the fast stochastic, having risen toward the 80-line, has moved to a slight decline within the neutral zone.

So it's not yet a venti, although maybe a grande.

SBUX has been moving swideways since April, with the range having contracted beginning in July. The current range is roughly between $26.40 and $24.25, or nearly 9%. That's plenty of volatility for a swing trader to work with. And if the price ends up breakout out of the range, then that's a nice bonus.

The preceding bear phase on the pps carried the price down 20.5% over its lifetime, a very respectable move. The psar has been in bear ophase for 11 days, and the new pps phase switch is the first time the two signals have been out of synch. that's another way of saying that SBUX is generally not a whipsawer. When this stock gets a signal, it tends to be followed up by a price move.

Over the longer term SBUX is in a strong uptrend that began in October 2008, so a bull signal is very much in line with the larger trend.

On the Person's chart, SBUX is trading just above the weekly pivot midline, with more fluctuate room to the downside than the upside.

Person's Table

	pps	pps open	upper pivot	lower pivot
SBUX $25.14		$24.84 aug4	$25.54 +1.6%	$23.56 -6.3%

To qualify as a breakout, SBUX has some work to do. It is trading below the 20-day simple average and the 200-day exponential moving average. It stands more than 5% below the nearest breakout point, and faces another reversal level up around 13%. So it's no slam-dunk.
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Reversal Levels

• $28.50, +13.4%
• $26.44, +5.2%
• $26.02, +3.5% (200-day ema)
• $25.31, +0.7%% (20-day sma)
• $25.14 <== You are here.
• $24.35, -3.1%

Bottom line: For my own account, I like this stock as an iron condor or some other sideways play. I like as a simple bull play, with the understanding that I would jackrabbit out pretty quickly at reversals near the top of the current range.

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Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.