NEW BULLISH Plays

Starbucks Corp. - SBUX - close: 32.58 change: -0.20

Stop Loss: 29.90
Target(s): 34.75
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Company Description:
Since 1971, Starbucks Corporation has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. In addition to its Starbucks retail stores, the company produces a wide range of branded consumer products globally, including ready-to-drink beverages, packaged coffees and premium ice creams. The company’s brand portfolio features Starbucks Coffee, Tazo Tea, Seattle’s Best Coffee and Torrefazione Italia Coffee, enabling Starbucks to appeal to a broad consumer base (source: company press release or website)

Why We Like It:
Worries over the consumer have faded. Investors are gobbling up anything that could benefit from a recovery in consumer spending. SBUX is nearing four-year highs thanks to the early December gains. SBUX's November consolidation in the $31-30 zone should offer new support. I am suggesting we buy SBUX or call options on a dip at $31.25. If triggered our first target is $34.75. I should mention that SBUX is currently in a legal battle with Kraft Foods (KFT) over distribution of SBUX's ground coffee brand but investors seem to be ignoring it.
FYI: The Point & Figure chart is very bullish with a long-term target of $54.

Trigger @ $31.25

Suggested Position: Buy SBUX stock @ $31.25

- or -

Buy the 2011 January $32.00 call (SBUX1122A32)
Buy the 2011 April $33.00 call (SBUX1116D33)

Annotated chart:

Entry on December xx at $xx.xx
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 7.1 million
Listed on December 8th, 2010