Starbucks stock under pressure after Deutsche Bank downgrade

Starbucks (SBUX.US) shares plunged over 1.3% on Monday after Deutsche Bank downgraded the coffeehouse chain to hold from buy with a $106 price target. Bank's analysts expect that further gains will be harder to achieve after the stock’s recent solid performance. Improving U.S. sales face a potential U.S. recession dynamic has that not gone away", said Deutsche Bank analyst Brian Mullan.

The analysts also stated, “In essence, we think the ‘easy part’ of the move has probably taken place with SBUX with the stock at $105, which is the reason for the ratings change at this point in time.” We believe ourselves to be really nonpartisan at current levels; neither beneficial nor detrimental.”

Starbucks (SBUX.US) stock price pulled back slightly following the downgrade, however sellers struggle to break below the earlier broken upper limit of the wedge formation. As long as price sits above, upward move may accelerate toward local resistance at $107.80, which is marked with previous price reactions and  23.6% Fibonacci retracement of the upward wave launched in March 2020. On the other hand, in case of a break lower, the nearest support to watch lies at $96.50. Source: xStation5