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Starbucks shares experienced a decline in premarket trading on Wednesday following the suspension of its 2025 outlook and the release of disappointing preliminary quarterly results. This occurred as new CEO Brian Niccol began to implement a turnaround strategy.
The 50-day moving average and the lower trendline of a symmetrical triangle have been defended by buyers, despite the fact that the stock is on the brink of a decline below the pattern. During a recovery, investors should observe overhead levels near $99 and $107.50, while also monitoring key support areas on Starbucks’ chart at $90 and $83.
In premarket trading on Wednesday, Starbucks shares declined after the global coffee chain suspended its 2025 outlook and reported preliminary fiscal fourth-quarter results that fell short of Wall Street expectations. This came as new CEO Brian Niccol began to implement a turnaround strategy.
In order to stimulate sales growth, Niccol, who assumed the role of CEO at Chipotle Mexican Grill (CMG) prior to joining Starbucks in August, expressed his intention to streamline the organization’s menu and reconsider its pricing strategy. Nevertheless, the coffeehouse chain stated that the modifications will require time, and that it was unable to halt a decrease in traffic during the most recent quarter.
Starbucks shares have increased by approximately 28% since Niccol’s appointment; however, the stock has remained unchanged since the beginning of the year due to a decline in sales that has resulted from increased competition and sluggish demand in its primary markets of the United States and China.
In the following section, we examine the technical indicators on Starbucks’ chart and identify critical price levels that warrant monitoring.
**Technical Analysis and Key Price Levels**
**Breakdown of a Symmetrical Triangle**
Starbucks shares have been consolidating within a symmetrical triangle since mid-August, when they breached the 200-day moving average (MA) that is closely monitored.
The stock is on the brink of a breakdown below the triangle on Wednesday, despite the fact that purchasers have recently defended the pattern’s lower trendline and upward-sloping 50-day MA. About an hour prior to Wednesday’s opening bell, Starbucks shares were trading at approximately $93, a decline of nearly 4%.
We will examine several critical levels on Starbucks’ chart that may pique the interest of buyers and also identify critical overhead areas to monitor during a recovery.
**Important Support Areas to Monitor**
Investors should monitor the price’s response to the $90 level in the event of a breach from the symmetrical triangle. Investors may seek purchasing opportunities in this region, which is situated near a trendline that connects the October 2023 trough and the April 2024 countertrend apex.
Selling below this threshold could result in a decline to approximately $83, where the stock may attract purchasing interest in the vicinity of the June swing high. This area also serves as the neckline of a double bottom that developed on the chart between May and July.
**Significant Overhead Levels to Monitor**
The shares may confront resistance near a multi-month trendline that joins a range of comparable trading levels on the chart from March 2023 to September this year, which could result in a move up to the $99 level if the symmetrical triangle’s top trendline is recovered.
A decisive close above this level could potentially ignite a rally to approximately $107.50, a point on the chart where investors may be interested in locating exit points in proximity to the significant November 2023 swing high.
This region is also situated just above a measured move price target that adds the distance of the symmetrical triangle to the upper trendline of the pattern. For example, a target of $107 is projected by adding $9 to $98.
In conclusion, the decline in Starbucks shares following the suspension of its 2025 outlook and disappointing preliminary quarterly results, as well as the implementation of a new turnaround strategy by CEO Brian Niccol, highlights the importance of monitoring key technical levels on the stock chart. Investors should pay close attention to critical support and overhead levels to make informed decisions during a potential recovery or further decline in Starbucks’ stock price.
