Carter Worth Expects A Correction In Starbucks

On CNBC's Options Action, Carter Worth spoke about his expectations for Starbucks Corporation (NASDAQ: SBUX).

He presented a couple of charts with historical performance of the stock and showed that it is currently trading significantly above its trend line. Worth thinks that the most probable scenario is a return to the trend line.

He also analyzed coffee prices and he showed a pattern on a chart that looks to him as a bottoming process. Higher coffee prices are not good for profitability of Starbucks and in the past, the stock went into a correction phase every time when coffee traded higher. On the other hand, Starbucks performed well on sell-offs in coffee.