Starbucks Corp (NASDAQ: SBUX) At Major Bottom Says Market Timer Frank Kollar

July 31, 2008 (FinancialWire) (By Frank Kollar)

Shares of Starbucks Corp (NASDAQ: SBUX) declined into mid-July, reaching lows that equal the 78.6% retracement of all gains since Starbuck’s 2001 bear market lows. This may be a tradable bottom for this beleaguered stock.

The 78.6% retracement level is an important Fib support and considering the time-frame, some seven years, it constitutes a major support level.

On Wednesday, July 30, Starbucks surprised the street with a quarterly loss. Analysts were looking for 18 cents a share this quarter. Yet Starbucks did not suffer the fate of other companies in the current weak financial market environment, and only lost about 2% in Wednesday’s trading.

This small loss is likely due to that major support level, at $13.84, reached two weeks ago. The odds are good that this was a low that will mark a bottom for this popular stock for some time.

Traders taking a long position, in the face of poor earnings, have a decent chance of substantial gains in coming months as long as the $13.84 lows are not decisively broken. $13.75 or so would make a good buy stop for a long trade.

This trade has higher than normal risk attached to it. Placing a stop is critical. But the potential profit should make the trade worthwhile.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

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