Starbucks Corporation SBUX was slipping about 6% lower on Monday, along with a number of China-based stocks.
The Hang Seng Index was 6.36% lower at $15,180. Alibaba Group Holdings, Ltd -- ADR BABA, and Nio Inc -- ADR NEO fell to 70, a more than 42% decline from the Jan. 4 opening price. When President Xi Jinping secured an unprecedented third term on Sunday and reshuffled his Politburo Standing Committee to elect loyalists, investors grew fearful that the Chinese Communist Party's goals could be bad for China's economy.
The news caused Starbucks to fall below the 200 day simple moving average SMA, which threw the stock back into a potential bear cycle, and caused it to fall below the 200 day simple moving average SMA. Starbucks had held above the 200-day SMA during the past few weeks, showing comparative strength to the general markets.
Starbucks has been trading in a mostly sideways pattern since July 28 between $83 and $93. On Sept. 8, Starbucks regained the 200-day SMA as support and has held above that level since.
Starbucks has resistance above $86.61 and $90.97 and support below $82.93 and $79.18.
See Also: Why Starbucks Shares Are Falling?