Harlan Pyan is a weekly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.
Harlan Pyan, the co-founder of All About Trends, was a guest on Thursday's edition of Benzinga #PreMarket Prep. As a specialist in trends, Pyan discussed why he is currently short shares of Starbucks Corporation SBUX.
Pyan stated that there is "a lot of overhead supply" at the $55-$56 level. He explained that "overhead supply" is similar to a resistance point, as it is a level where the "bulk of the population owns the stock" in the price point in which many investors see their position returning to a break-even point.
The Psychology
He continued that Starbuck's chart is showing a "classic" example of an issue that broke above a trend line and has been rising to "kiss" where it broke down.
As of early Thursday afternoon, shares of Starbucks were higher by 3.17 percent at $55.67. The stock hit a 52-week high of $59.32 in early August and dipped below the $50 mark during Monday's initial stock market crash.
Pyan also noted that he "can't be a big bull" at this point and "to trade what you see." He has seen stocks like Starbucks "snapping back" and meeting resistance.
"Resistance is your phrase of the day," he added.
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