I was just looking at SBUX and I noticed something special that I haven't written about very much.
I don’t know if all of or any of my readers are familiar with the Fibonacci numbers and how they relate to trading but they are ever present in the game. They are nearly as prevalent as Pivot Points. The theory is when a stock takes a significant drop or a significant rise it retraces about 50% of the action before it resumes the original course either down or up. These numbers are how the pro’s determine support and resistance over a period of time.
Here is SBUX. Point “a” is its recent top, point “b” is its recent bottom and point “c” is the 50% retrace Fibonacci point between “a” and “b”. Although it didn't quite reach the full 50% retrace, which way do you think it goes next?
Of course just because nearly every trader and automated program in the world (and I mean "the world" watches these numbers doesn’t mean that SBUX has to go down. But that's a chance I'm not willing to take.