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JimVanMeerten (57.13)

Does Starbucks give you the shakes?



August 23, 2011 – Comments (0) | RELATED TICKERS: SBUX

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Does Starbucks (SBUX) give you the jitters?  This is one stock that seems all but unstoppable. The total return to stockholders has been 127 % in the last 3 years which is about 275 % of what you would have gotten from a general index fund.  Can this stock keep up the momentum or are we at a point that entry at this level is not desirable?

Barchart technical indicators:

1 - When there is a stock that has been on your watchlist for some time a temporary market dip might be an opportunity to enter into a position or maybe add to your present position

2 - Barchart 80% short term technical sell signal -- might be just a pull back signal

3 - Trend Spotter sell signal

4 - Below its 20, 50 and 100 day moving averages

5 - 13.42% off its recent high

6 - Relative Strength Index 42.47 and still falling

7 - Barchart computes a technical support level at 34.65

8 - Recently trading at 35.43 which is below its 50 day moving average of 38.07

Summary: Starbucks (SBUX) is selling at a 43% premium to the market but the premium may be justified.  If the sales and earnings consensus is met savvy investors who buy on this dip could still see between 10.50% to 14.50% annual return over the next 5 years.  The big question is buy now or wait.  My prediction is those that wait will regret it.

Jim Van Meerten is a Marketocracy Master

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