Dunkin' Brands to Follow Starbucks Lower?

Dunkin’ Brands to Follow Starbucks Lower?

The correlation between Dunkin’ Brands (DNKN) and Starbucks (SBUX) has been relatively high in the past and while that relationship has shifted over the last several weeks, it may be ready to realign. The disappointing Starbucks earnings report after Thursday’s close comes as Dunkin’ is testing resistance at its 50 day moving average and after it has formed three high wick lower close candles. If DNKN were to move lower and close below the $51.75 level it would suggest further downside, potentially to a retest of support at the 200 day moving average.

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