NEW YORK (TheStreet) -- Shares of Starbucks (SBUX) - Get Report were advancing in early-afternoon trading on Wednesday after a U.S. judge dismissed a case against the company alleging that it is under-filling its iced drinks.
Judge Percy Anderson noted that the Seattle, WA-based coffee chain only mentions the ounce size of the cups it uses on its signs rather than the amount of liquid in them.
The plaintiff did not bring "any viable claims" against Starbucks in the case, Anderson said.
Starbucks has been on the decline since peaking in early April, and while the chart seems to portray a vicious downtrend, it is only down about 10% from those highs. Certainly not a performance to be proud over, but now it appears the stock may have found support at $55 and is ready to rise up again.
There is a higher low on the chart from the June low, a good start. Monday's action was constructive, with strong turnover and heavy option flow (specifically Nov. $57.5 call strike).
The moving average convergence divergence (MACD) is turning up and, while it's a bit early to call a buy signal, with a couple more days it'll be in view.
Resistance is certainly in place above here, with the $57-$58 level looming large (arrows). However, we see that momentum is starting to pick up and the strong buying impulse could move this stock up in a hurry.
Want more like this from Chris Versace and Bob Lang BEFORE your stock moves? Learn more about Trifecta Stocks now here.
(Starbucks is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of A-.
The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: SBUX