SBUX bought @ $82.50 – it went up to $112, which represents 35.8% return in 5 months

We recommended the stock back in September, 2020 as a great long-term value play, and as one of our favorite picks in the Consumer Discretionary sector and in the underlying Retail-Restaurants industry. We noted back then that the price had staged a very powerful upward push throughout August, resulting in a break of the strong resistance around the $82 mark, which indeed presented a great buying opportunity for our followers. We recommended for our clients to wait for the price to re-test the prior resistance as support before committing fully to the stock and opening their long positions. The anticipated price development occurred shortly thereafter and the stock confirmed our buy signal after it re-tested the $82 from above. Subsequently, the stock moved 35.8% higher in 5 months. The stock is part of the XLY, which tracks a market-cap-weighted index of consumer-discretionary stocks drawn from the S&P 500. XLY is a portfolio of US large-cap consumer-discretionary stocks. XLY’s basket of stocks represents the sector well, despite concentration in the largest names. As a part of the Select Sector SPDR suite, the fund pulls its holdings from the S&P 500, which differs from the broad-market universe used by competing funds in that it excludes small-caps and most midcaps. Through our correlation-confirmation approach we compared XLY’s price performance to the XLK Technology Select Sector SPDR Fund, and used the strong and positive 10-year correlation of 85% between the two indices in order to validate our market recommendations.


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