SBUX update?


A friend recently sent me stuff on the markets from Harry Dent. He now thinks that the Dow will rise this year to 30000 or higher before dropping to 3800. As you may know this fellow has a different methodology and relies to a great extent on such factors as population growth (or shrinkage) and similar things. I have no idea what to make of it but being very gullible I do try to keep an open mind and search for things that may support his views (and negate the immediate bear view). Starbucks is such a stock.

Looking at the long-term chart of SBUX, it is possible to discern a fairly straightforward 5 wave sequence going all the way back to 1992 when it went public (at $17 but there have been stock splits). The only thing that is not clear is if the sequence is complete. Wave 4 in the Bigchart is without any doubt a 4th wave, an A, triangle? B and C structure where the waves A and C are equal, but despite already being about as large as wave 1, could nevertheless rise further to about $80 or more. Dent’s argument is basically that in the last year of a long-term uptrend the increases are normally rather explosive. If so such a scenario would be quite reasonable. We would now be in wave 4 of 5 or already in wave 5 of 5.

So one could short this stock with a stop at around $68, and do it again at, say $78 if that does not work right away. Or you can wait and only the the second trade or whatever iteration of it that you prefer. Put options may be an even better choice.

SBUX update

sbux july 26 2013

There were some good calls and some that were not that good, please see previous blogs. But here we are now solidly back in the old channel  and trading at a P/E close to 35x. We are not sure how to count this one other than to assume that from the lows a 5th wave unfolded. It should be close to completion if not already there. A sell at $75 for sure and given today’s high of $73.50, why wait?

SBUX, Starbucks update from years ago

sbux  feb1 2013sbux feb 1 2013

This is when I wonder why I do not take my own advice. See previous blogs, a buy at $5 etc. Even so I do not understand why this one is up here. Coffee must be an illegal drug or something like that. Anyway, if you still own it, it is now a sell. In fact it may be a short if that is still in your vocabulary.

SBUX. Starbucks

sbux oct 2011

This was a sell before, the all time high in 2006 being about $40. It has been sitting here for about 4 months adding only a dollar or two at the most. Waves C and A are now equal. Perhaps another dollar is needed to get to the upper trend line but that should be it.