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We are recommending yet another bullish trade on Starbucks (NASDAQ:SBUX).  We “bought to close” our SBUX April 18th $71 put write because most of the option’s value had dissipated as SBUX rose to a new high this week. Now, we want to roll that trade out for more income this month.

This is the fourth put write we’ve recommended on SBUX this year, and since the stock keeps rising, we keep collecting profits.

Investors Still Seeking Growth

The stock is still showing a great deal of momentum and has largely avoided losing much ground during the correction over the last two weeks. We feel that selling another round of put options (and compounding our premium income) is the best way to approach the market right now because it builds in a small hedge.

When recommending our trade on The Coca-Cola Company (NYSE:KO), we said investors are looking for defensive stocks that have growth potential. SBUX’s strong growth potential is something we’ve highlighted in the past, and the fact that it has seen less of a pullback than the broader market over the past two weeks is a good sign.

Breaking above Resistance at $72

Old resistance often becomes new support. We say that time and time again, and it’s been especially true with our trades on SBUX. This time SBUX has broken above resistance at the $72 level, and if that becomes a new support level, the stock could head higher.

Daily Chart of Starbucks (SBUX) — Chart Source: TradingView

SBUX set a new 52-week high on Monday, so it may test the $72 support level in the coming days. The company is also facing some concerns about consumer backlash against changes to its rewards program.

Still, we think a put write on SBUX is a good position to have open as investors look for stable fundamental growth.

To find out which SBUX puts we’re selling — and to get access to our full portfolio of income-generating trades — consider signing up for risk-free trial subscription to Strategic Trader today. 

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader.

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