Starbucks (SBUX) Resumes Strong Uptrend After a Three-Year Consolidation Period
In trading and investing, there’s a saying that goes: “the longer the base, the higher the space.” In other words, assets that go through a lengthy consolidation period tend to exponentially rise after the price breaks out. We are seeing this unfold in Starbucks.
SBUX has gone bananas after breaking out of consolidation. | Source: Yahoo! Finance
The stock range traded between $62 and $48 for over three years before breaking out in October 2018. Now that the stock has breached resistance of $62, it has steeply risen to the all-time high of $90.48. It is actually in price discovery mode, which means that Starbucks is charting its next resistance. As long as it is in price discovery, it is expected to continue to print fresh all-time highs.
If you’re looking to buy SBUX shares, you might want to wait for it to drop to the diagonal support of $85. Then, you can try riding the stock to as high as it prints a new resistance level.
Blue Skies for Walt Disney Company (DIS) After Four Years of Consolidation
Just like Starbucks, Walt Disney Company (DIS) went into a multi-year consolidation before resuming its uptrend. Its range traded between $90 and $115 from February 2015 to March 2019. In April of this year, the stock finally breached resistance of $115 and never looked back.
DIS having a strong breakout rally after four years of range trading. | Source: Yahoo! Finance
A look at the weekly chart shows that the stock has printed a large bull flag to indicate the continuation of the strong uptrend.