Will Starbucks’ Coffee Brewing Brew More Profits?

Starbucks Corporation (SBUX) is a multinational conglomerate that specializes in coffee products, a global coffeehouse chain and other bakery products. Its coffee products range from freshly brewed coffee to ready-to-drink and single-serve coffee. Starbucks has become very successful at branding itself as the go-to specialty coffee retailer. SBUX is listed on NASDAQ and is component of Nasdaq 100 and S&P 500 under Consumer Discretionary.

SBUX price had a last leg up to hit $122 in late July 2022. The price then retraced and bounced between $106 and $117. The first hint of weakness appeared with a gap down on 29 Oct with a big spike in volume, suggesting presence of supply. The confirmation came on 7 Jan 2022 as Wyckoff last point of supply (LPSY) when the price broke below $106 and completed the Wyckoff distribution phase. This was followed by Wyckoff sign of weakness (SOW) to around $92 accompanied by an increase in volume.

The weak rally off the support at 92 suggested weakness ahead. A selling climax was formed in Mar 2022 followed by an automatic rally. The rally hit $92 but reacted with a SOW as a lower low test. The 4 May bar gaps up with a huge spike of volume. However, the reaction broke the long term support of $70 as a spring-like action. Nevertheless, the volume subsequently decreased suggesting exhaustion of supply. This…