Coffee Stocks Are Getting Cold

Shares of Starbucks (SBUX) have retraced to a key support level just above their 200-day moving average, and those of Dunkin' Brands (DNKN) are also testing long-term support above their 200-day moving average. Both companies report earnings on Thursday and the technical condition going into those reports looks tenuous. Disappointing reports could trigger the start of intermediate downtrends.

Starbucks broke out of a large symmetrical triangle in March and made a perfect measured move back up to the $65 area two months later. It rapidly retraced all that breakout rally and has been moving horizontally above the former $57.50 breakout level and the intersecting rising 200-day moving average. The relative strength index has been moving sideways below its center line after briefly bouncing off its oversold level last month. The Chaikin money flow is well into negative territory, suggesting the stock is under heavy distribution. ...115 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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