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LivestreamMenuStarbucks has been consistently rallying since the end of 2025, but it has been a jagged advance much of the way. Thus even though we can see distinct higher highs and higher lows, some of those pullbacks certainly have given would-be buyers pause along the way. More recently, SBUX reported earnings two weeks ago and has essentially been treading water ever since, remaining relatively close to its most recent highs. This follows a notable pullback from mid-May to early June, which quickly reversed and sent the stock back toward its current 108 resistance zone. The question now is whether the stock finally can break out. Since then, SBUX has made another higher low near 102, with the ensuing comeback now giving it a chance to complete the handle of this bullish cup-and-handle pattern. As indicated on the chart, a breakout would produce a measured move target near 125. From a trading perspective, the 102 level would be a recommended stop loss, which is near the bottom of the pattern’s handle. However, there is much more going on with the stock beyond this potential short-term setup. First, SBUX actually has outperformed the S & P 500 since late 2025. We can see that on the far-right side of this relative SBUX/S & P 500 chart, with the relative line having ticked higher lately. That potentially could be the beginning of a more sustained period of outperformance. Also of note is how that outperformance began. The relative line made lower lows into the middle of 2025, while the 14-month RSI made higher lows, creating a positive momentum divergence. This relative improvement now has been in play for over a year. If past performance is any indication of what can happen from here, SBUX could have the ability to extend this relative strength further. In fact, the last time we saw such a clear positive momentum divergence on the monthly relative chart was near the lows of the Great Financial Crisis. SBUX underperformed the S & P 500 from the middle of 2006 through late 2008. Toward the latter part of that decline, however, the 14-month RSI began showing signs of improvement, as displayed by the higher lows in the indicator. What followed was significant and sustained outperformance versus the S & P 500 all the way into the middle of 2015. We know the current situation is not apples-to-apples by any means. Still, it is encouraging that this most recent bounce versus the market could have a more meaningful and longer-lasting effect than what we’ve already seen up to this point. Lastly, here is a monthly log-scale chart going back to 2011, which shows that SBUX is getting closer to the top of a five-year trading range. Looking back over the years, this is by far the biggest and longest trading range the stock has endured. The prior two ranges (or trading boxes) were shorter in duration, but both ultimately resolved the same way: SBUX broke out and continued higher for years afterward. From this longer-term perspective, the stock still has some work to do right now… And that brings us back to the daily chart. If SBUX finally breaks out and begins moving toward that 125 measured move price target, it also would be pushing through the top of this longer-term, multiyear range. At that point, momentum could accelerate further, opening the door for the stock to challenge its all-time highs and potentially continue higher from there, much like we’ve seen following prior multi-year breakouts. —Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.Read More
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