Today’s Trade Idea: Sell-short SBUX for bucket 2 swing trade

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Sell-short SBUX for bucket 2 swing trade

  • We have been watching SBUX for several months and added it to the consumer discretionary bearish watch list on the Market Rover (to which all of you have access). 
  • In late August SBUX finally flipped from neutral trend to bearish and we now see an opportunity to try this stock from the short side for a trade

Entry: Sell/short SBUX stock in the $98.50 – 94.50 area

Target 1: $94 Target 2: $92

Stop loss: A daily close above $99 would be a stop loss signal.

Options trade idea:  

Buying the SBUX November 17th 2023 95 – 90 bear put spread. This means to buy the 95 strike put and sell the 90 strike put, all as one spread, i.e. as one trade.

On options positions we work with a 3 week maximum time stop. If the profit target or stop loss has not been reached within 3 weeks, one can then close out of the options trade or roll it out to the next month.

Chart: