Cramer Roasts Starbucks' CEO, But Its Weak Charts Are Nothing New
The stock is down big after a poor quarter. I've been warning about the weakening technicals for quite sometime.
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Starbucks SBUX delivered a very disappointing quarter and guidance cut and the stock is down sharply Wednesday. New-ish CEO Laxman Narasimhan appeared on CNBC Wednesday morning and Jim Cramer did not smile and ask softball questions.
Cramer asked why management is offering incremental fixes when obviously more is needed. I cannot remember a time when he followed one challenging question with another.
Let's go back to the charts.
In the updated daily bar chart of SBUX, below, I can see that the shares gapped lower Wednesday morning and have continued lower. SBUX trades below the declining 50-day moving average line and below the declining 200-day moving average line. This is not news and a casual glance of the charts shows the trend.
In this weekly Japanese candlestick chart of SBUX, below, we don't have Wednesday's price action plotted because this chart is not updated until Friday. We have to imagine prices in the $75 area. A retest of the 2022 lows is now a possibility.
In this daily Point and Figure chart of SBUX, below, I can see the price action with no gap or price void. A downside price target in the $55 area is being projected.
In this weekly Point and Figure chart of SBUX, below, I can see a downside price target in the $57 area.
Bottom-line strategy: I started warning TheStreet Pro readers about the weakening charts of SBUX way back on May 24, 2023. And here we are. From today's TV interview it sounds like the problems confronting SBUX will take more than one or two quarters to fix.
I would never say that you should give up coffee but you may want to switch where you invest. Maybe find another establishment to get a cup of your favorite brew?
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