Shares of Starbucks (SBUX) are trading today at a new 2017 high, very near a fresh 11 month high, having paused at its mid-December highs.
I think it is safe to say that despite the stock’s under-performance over the last year and a hal, it’s starting to look like a healthy consolidation after a fairly epic 1500% rally from its 2008 financial crisis lows:
It wasn’t today’s price action or the charts that caught my attention in SBUX, but what appears to be a near dated bullish roll in call spreads. When the stock was $59.34 shortly after 2pm a trader sold to close 6,000 of the Apr28th weekly 58 / 59.5 call spreads at 87 cents and bought to open 12,000 of the Apr28th weekly 61 / 62.5 call spread for 29 cents. This appears to be a trader rolling up some profits, but using those profits to double the size of the position and target a breakout. The choice of expiration is interesting as it targets the company’s fiscal Q2 earnings report slated for April 27th after the close, and the choice of strikes is interesting because it targets a breakout of the recent consolidation towards the 2016 high just above $61, with the best case scenario of $62.50 very near the all-time closing high in October of 2015.