Swing Trade Idea (SBUX) – June 11, 2024
Our bearish trade for Tuesday, June 11th is Starbucks Corp.(SBUX). SBUX is part of the Consumer Discretionary Sector, which has performed at -0.46% over the last month, with SBUX overperforming at 7.82% over the same period.
SBUX is in a bearish trend and found resistance at $83, from where it is pulling back to lower levels. The $83 mark is at the top of a downtrend channel and the Consumer Discretionary Sector is also trading at the top of a downtrend channel. As strength is decreasing, we expect to see further downside over the duration of this trade. This Credit Spread offers a return of 46% of the Premium over the Width, which is an excellent ratio.
As a close, if SBUX were to trade above $83 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $5.54 Debit.
