Starbucks' (SBUX) powerful three-week recovery rally may soon run out of steam. The stock has rallied nearly 15% from its Aug. 2 low, but it is now showing signs of easing momentum as major overhead resistance comes into play. Starbucks is now roughly a dollar below a flat-lining 200-day moving average, a level that may prove very difficult to push through without additional basing action. For Starbucks bulls who took advantage of the deeply oversold condition in late July through early August, an opportunity to book some healthy profits is developing.
Starbucks plunged on in late July after the retailer's weaker outlook. The stock took a 9% hit on the news as volume surged to its heaviest level in over a year. Follow-through volume remained robust as shares fell to fresh 2012 lows three days later. Once below its Jan. 3 lows, SBUX began to reach a deeply oversold level. The stock became completely sold out near the $43.00 area, setting the stage for a healthy rebound. Shares have been moving steadily higher off this support level and are working on their fourth straight higher low on the weekly charts....246 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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