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Frank started market timing in 1982 when the Federal Reserve cut interest rates and sparked the 1980’s bull rally. Realizing that this rally could have been forecasted, he began to search for indicators which had similar forecasting ability. Within a year, his first newsletter was launched,... More
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  • Has Starbucks Corp (NASDAQ: SBUX) Bottomed Out? 0 comments
    Aug 7, 2012 3:32 PM | about stocks: SBUX

    August 8, 2012 (By Frank Kollar)

    Starbucks Corp (NASDAQ: SBUX) suffered through a self-inflicted correction after announcing a weaker outlook on July 26.

    From the day of the latest earnings report, when SBUX closed at $52.41 to its selloff low at $43.04 only five days later, the coffee retailer had lost 18%.

    Could the decline be over?

    SBUX stayed at its lows for four trading days, and it rallying on Tuesday, August 7, up some 3.5% near the close. Importantly, that low is right at an important support level.

    Chart Courtesy of StockCharts.com

    $43.16 is the 50% retracement level for the entire rally from the August 2011 correction lows to the April 2012 rally highs. The 50% correction may have stopped the decline as traders see it as a likely reversal level.

    A bullish trade here with a stop just below this support level would be a low-risk trade for what is a great long-term company to own.

    The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy does not have a position in Starbucks.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SBUX over the next 72 hours.

    Stocks: SBUX
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