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Joined: 28 Dec 2005
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 Posted: Sat Jan 28, 2006 1:12 pm Post subject: SBUX Chart & Strategy |
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SBUX closed at about 32 Fri and reports earnings Wed. Fall and winter are seasonally strong months. However, slowing consumption last quarter (although mostly for big ticket goods) and the start of the seasonally weak period may be negative. It's possible SBUX will make a big move to the downside, similar to a year ago (shown in the one year daily chart below), although the move may be limited by the consolidation over the past three months.
MACD may be turning bullish, although relative price is high. The Feb 32.5 calls are 0.70 and Feb 32.5 puts are 1.15. A Feb 32.5 straddle is too risky (at current prices) and other option prices are overpriced. So, perhaps, a small position in Feb 32.5 puts is best or a larger position with some Jul 30 calls, currently at 3.70, in case there's a big move to the upside. SBUX is near an all-time high. Major support is 30 and 28.
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