Starbucks’s schizophrenic 2016 is over. 2017 looks like it is going to be a whole lot better
2016 was not among the best of years for Starbucks investors, who saw the price of their shares declining to $50.84 in October, down from $64.00 a year earlier. However, the last two months of 2016 were unlike the rest of it. Starbucks stock rose sharply to $59.54 by mid-December, bringing the bulls’ hopes back to life… just to plunge back down to $53.81 by the end of January, 2017. A roller-coaster like that could easily make you sick, especially if it is your money on the table. Our way to deal with it is by using the Elliott Wave Principle. In that case, there seems to be nothing to worry about.
At least in the short-term, Starbucks stock’s future looks bright. As the 4-hour chart above shows, a textbook example of the famous 5-3 Elliott Wave cycle to the upside has emerged from the October 2016 bottom. There is a clear five-wave impulse up to $59.54, followed by a three-wave A-B-C decline, which seems to have terminated almost exactly at the 61.8% Fibonacci level. In addition, the retracement has been developing within the parallel lines of a corrective channel, whose lower line managed to discourage the bears near the $54 a share area.
If this is the correct count, the $60 mark is likely to be reached very soon. In fact, an ever bigger rally is highly probable, because the least we should expect is another impulsive advance, similar to the one we saw in late-2016. Starbucks looks like a good choice right now. And we are not talking just about the coffee.