Starbucks (SBUX) has shown a consistent upward trend since late 2025, although the journey has included some volatility. Recently, after reporting earnings, the stock has stabilized near its recent highs, particularly around the 108 resistance level.
A notable pullback occurred from mid-May to early June, but the stock rebounded, forming a bullish cup-and-handle pattern with a potential breakout target of 125. The 102 level is suggested as a stop loss, aligning with the pattern's handle. Importantly, SBUX has outperformed the S&P 500 since late 2025, indicating a possible sustained period of relative strength.
This outperformance began with a positive momentum divergence, where the stock's relative performance improved despite lower price levels. Historical patterns suggest that such divergences can lead to significant future gains, as seen after the Great Financial Crisis.
Additionally, SBUX is approaching the top of a five-year trading range, which has historically led to breakouts and extended upward movements. If the stock breaks through the 125 target, it could accelerate momentum and challenge all-time highs, similar to past multi-year breakout scenarios