EarningsBeats Digest

Published: Wed, 07/14/21

EarningsBeats.com Digest for July 14, 2021

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Another Pre-Earnings Surge Is Brewing

I know this title is a bad pun, but Starbucks (SBUX), if you haven't noticed, is on a roll and is likely headed a latte higher. The charts shows a lot of strengthening on both an absolute as well as relative basis. The most obvious improvement is the breakout that the stock enjoyed to open this week. Monday's close resulted in a fresh all-time high and Tuesday simply tacked on another 1% roughly:

The daily PPO hasn't been this strong since SBUX' last pre-earnings run back in April. If the overall stock market cooperates, I expect that SBUX has much more room to run. Wall Street certainly appears to be accumulating the stock as it takes just one look at that AD line to realize there's been some serious buying taking place throughout the day. It's also a positive that restaurants ($DJUSRU) just recently cleared its all-time high and the group has shown its most sustained relative strength since March. After a few months of selling and consolidation, SBUX appears to be perkolating once again.

Happy trading!

Tom Bowley

Chief Market Strategist

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