Starbucks Stock Nears Top of Its Trading Range
Listen to the story
Starbucks shares are approaching the top of a multiyear price range, and analysts who study chart patterns believe the stock could soon break out to higher levels. In financial markets, a breakout happens when a stock's price rises above the highest point it has reached for a long period, which can signal a new upward trend.
Berkshire Hathaway, the company led by Warren Buffett, also appears to be showing a breakout pattern on its charts. According to technical analyst Katie Stockton, this makes Berkshire shares a timely buying opportunity right now. Technical analysts look at price charts and trading patterns, rather than a company's business results, to predict future price movements.
Meanwhile, fast food chains are changing their drink menus. Both McDonald's and Starbucks have been adding energy drinks to what they offer customers. Energy drinks are popular because they give people a quick burst of energy, often thanks to caffeine and other ingredients. By selling these drinks, fast food companies hope to attract more customers and increase their sales in a competitive market.
The two stories show two different sides of the same companies. On one hand, investors are watching Starbucks' stock performance closely, hoping for gains if the breakout happens. On the other hand, Starbucks is also working on its everyday business by adding new products like energy drinks. Both moves are part of the company's effort to grow and stay strong in a changing market.
Vocabulary10 words
- multiyear
- covering more than one year
- chart pattern
- a shape formed by price movements over time
- break out
- to move suddenly above a normal price limit
- technical analyst
- a person who studies price charts to guess future prices
- buying opportunity
- a good moment to purchase something, like a stock
- energy drink
- a drink made to give people fast energy
- investor
- a person who puts money into a company to earn more
- sales
- the amount of things a company sells
- trend
- the general direction something is moving
- competitive
- involving strong effort to do better than others
Quiz
Answer key
1. A price rises above its usual highest point 2. They are a good buying opportunity right now 3. To attract more customers and boost sales
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
Starbucks shares are approaching the top of a _____ price range.
Analysts who study chart patterns believe the stock could soon _____ to higher levels.
This can signal a new upward _____.
Berkshire Hathaway also appears to be showing a _____ pattern on its charts.
According to technical analyst Katie Stockton, this makes Berkshire shares a timely _____ right now.
Technical analysts look at price charts rather than a company's _____ results.
Both McDonald's and Starbucks have been adding _____ to their menus.
Energy drinks give people a quick burst of energy, often thanks to _____.
Fast food companies hope to attract more customers in a _____ market.
Investors are watching Starbucks' stock _____ closely.
Discussion questions
- Do you think stock charts can really predict future prices? Why or why not?
- Would you buy energy drinks from a fast food chain like McDonald's or Starbucks? Why or why not?
- Why might investors be interested in both Starbucks and Berkshire Hathaway at the same time?
- How do you think competition between fast food chains affects the products they sell?