Elliott Wave Theory : SBUX

My last post was regarding the efficacy of the Starbuck's franchise. John Tait, aka Fickle Trader, was kind enough to post a chart for me under the comments column of my post. While analyzing this chart, my fellow writer, jwu, suggested the possibliity of Elliot Waves in the SBUX trend.

I did some research on the idea of Elliot Waves and this is what I came with. Essentially, this wave theory states that the market, as well as stocks, move in a wave-like pattern. There are two phases, where it either goes up or down in an alternating pattern. Each phase consists of 5 seperate "waves" as it moves to its eventual low/high. For more information regarding this subject, go here.

Although not as well-versed in the theory as many people out there, I believe there is an aparent wave trend in the SBUX trend line. Following the chart within the last year, it seems that there have already been 7 seperate phases, 4 of them downwards (blue) and 3 of them upwards (red). From what I can tell, it seems SBUX is following an upward trend, currently on the 3rd wave of the phase. If I'm correct, look for this stock to hit an eventual high within the next month.

If anyone has further suggestions or corrections regarding the subject, feel free to leave a comment or email me. That's all for now. Good luck and happy trading.

-KW