Starbucks shares have fallen nearly 10 percent in the past month, but one top technician says the coffee chain is poised for a breakout.
The stock “has been weak and may have some bounce potential,” Carter Worth of Cornerstone Macro said Friday on CNBC’s “Options Action.”
While analyzing Starbucks charts, Worth pointed out a specific trend where the stock typically breaks out past the resistance level, then checks back to the support level and then ultimately breaks out again.
Most recently, “you can see a 20 percent move up, [then] a 10 percent giveback. My guess is that we’ve found support, and we’re going to get a good bounce,” Worth said. “I want to make the bet that Starbucks, after selling off 10 percent, is going to come to life. I’m a buyer.”
Starbucks shares were trading around $58.60 midmorning Monday.
Charts point to breakout for a beaten-down consumer stock