Jim Cramer Calls Starbucks A 'Stimulus Play': Golden Cross Signals Bullish Run Ahead

Starbucks Corp SBUX is brewing excitement as a Golden Cross formation suggests a potential bullish run.

The stock is up 6.84% over the past year, with a 3.94% gain year-to-date.

Jim Cramer recently put the spotlight on Starbucks, naming it one of his top “stimulus plays” in the wake of China’s renewed economic efforts, alongside heavyweights like Alibaba Group Holdings Ltd BABA BABAF and Apple Inc AAPL.

In a Sept. 30 tweet, the “Mad Money” host said:

Back in action after some nice time off and i see that the Chinese are, once again, stimulating and everyone's back… Perfect….Sorry to be so cynical. But if you want stimulus plays: BABA, AAPL and SBUX will do

— Jim Cramer (@jimcramer) September 30, 2024

Cramer's call comes at a pivotal moment for Starbucks. The coffee giant faces headwinds in its second-largest market, China. Last quarter, Starbucks saw a 14% drop in same-store sales in China. The U.S. market experienced a more modest 2% decline.

Read Also: Is Starbucks Stock a Buy, Sell or Retain at 24.79x P/E?

Despite these challenges, the technicals suggest Starbucks stock is gearing up for a strong push forward.

Chart created using Benzinga Pro

The Golden Cross — a key technical indicator where the 50-day moving average crosses above the 200-day moving average— signals that bullish momentum is taking hold.

With the current share price at $97.36, Starbucks stock remains well above its 50-day SMA of $88.43 and 200-day SMA of $87.26, reinforcing the bullish signal.

Chart created using Benzinga Pro

Additionally, Starbucks stock is trading above its shorter-term moving averages, with its eight-day SMA at $96.18 and its 20-day SMA at $95.33, both of which are also bullish signals. This alignment of moving averages shows that Starbucks stock has maintained consistent upward momentum, even amid some broader market volatility.

While Starbucks continues to navigate its union negotiations in the U.S., CEO Brian Niccol has signaled a new era of constructive dialogue, which could further stabilize the company's U.S. operations.

Investors are keen to see if Cramer's endorsement and the Golden Cross can help fuel the stock's next move higher.

As the coffee retailer navigates both economic pressures and labor relations, the technicals suggest the stock is well-positioned for a breakout.

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