On Friday’s CNBC’s Options Action, the crew analyzed the performance of Starbucks stock. Starbucks has pulled back over 10% over the last month after breaking out above its $60 resistance level. Starbucks broke out from a wedge formation in April of 2016 but has retraced back to the breakout level. After a 50% retracement from the initial breakout, it provides an entry for a continuation higher. Expecting a bounce higher off the $60 support area, Michael Khouw suggested buying an Sept 60/65 Call Spread for a $1.20 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: CNBC Options Action