Bearish – SBUX – $71.57
Markets challenged a pivotal level at the end of the week closing just above the major $300 support level. As many sectors have started to look weak and starting to break below key levels, our view is decidedly more bearish going into next week.
SBUX Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang looked at SBUX and the challenging environment ahead. With a completed head & shoulders and break below the neckline, underperformance against the discretionary sector, SBUX is poised to continue lower. WIth 95% of stores reopened and tepid demand for morning coffees in a work from home environment, our view is that their positive Q4 guidance will be revised lower in the coming months. Expecting SBUX to move lower, Tony is using an August $72.5/$62.5 Put Vertical @ $3.27 Debit. As of Friday’s close, these puts were trading for $3.36 Debit.
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