Starbucks share price took a significant blow on Wednesday as the company admitted that the coronavirus had affected its Chinese operations. Despite Q1 earnings which beat market expectations, the Starbucks share price tumbled 2.7% on the day. The company said it could not provide forward guidance for 2020 as the coronavirus outbreak has shuttered more than half of its 4300 Chinese outlets.
Starbucks earnings came in at 79 cents a share, better than the 75 cents earned per share a year ago and the latest market consensus of 76 cents per share. Despite the blow by the coronavirus outbreak, the company executives remain positive about the future.
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Technical Outlook for Starbucks Share Price
Starbucks share price broke below the 38.2% Fibonacci retracement from the swing low of 8 March 2019 to the swing high of 25 July 2019 following today’s selloff. It is now heading towards the next downside target, which is the 50% Fibonacci retracement level at 84.63 and site of many intervening highs and lows which reverse roles at multiple times from July to December 2019. A break below this level targets 82.64 (previous lows of 17 June, 24 October and 22 November 2019) and 81.20 respectively (10 June and 5 November lows).
On the flip side, a recovery from present levels could retest the 38.2% Fibonacci level, which sits at 88.24. 89.33 and 91.79 remain valid targets if the price recovery that follows the predominant trend resumes.