Starbucks Corporation (SBUX​) has been a popular stop for a "cup of joe" for many years. Over the years, the brand has expanded to offer many innovations of beverages and more recently diversified food offerings. Today's earnings report kicks off the 2017 holiday season as Starbucks shifts from pumpkin lattes to drinks poured into this year's holiday cup. Will investors be critical of this cup or be happy with the spirit of quarterly earnings and year-end guidance?

The coffee-based restaurant chain is expected to post earnings per share of 55 cents when it reports results after the closing bell on Nov. 2. The stock is not cheap, as its P/E ratio is 28.01 with a dividend yield of just 1.80%. (See also: Starbucks 4Q Earnings Could Surprise Investors.)

Shares of Starbucks have been below the 200-day simple moving average at $57.19 since the market had a negative reaction to earnings on July 28. Since then, the stock has been trading in a range between $52.58 set on Aug. 18 and $56.43 set on Oct. 13. Reaction to today's earnings should end this trading range.

Investors should consider Starbucks competitors, Dunkin' Brands Group, Inc. (DNKN​) and McDonald's Corporation (MCD). Dunkin' missed earnings per share estimates on Oct. 26, but the stock rebounded to a post-election high on Oct. 31. McDonald's set its all-time high on Oct. 20, reported earnings on Oct. 24, and then retested its high on Nov. 1. Perhaps coffee-based fast-food restaurants are where Americans wish to dine – reaction to earnings for Starbucks will confirm or deny this notion. (For more, see: Who Are Starbucks' Main Competitors?)

The weekly chart for Starbucks

Technical chart showing the performance of Starbucks Corporation (SBUX) stockCourtesy of MetaStock Xenith

The weekly chart for Starbucks is positive, with the stock above its five-week modified moving average of $54.96. The stock is also above its 200-week simple moving average, or the "reversion to the mean" at $51.02, which is a key level to hold on a negative reaction to earnings. The 12 x 3 x 3 weekly slow stochastic reading is projected to rise to 45.74 this week, up from 39.74 on Oct. 27.    

Given this chart, my trading strategy is to buy weakness to my weekly value level of $54.44 and to reduce holdings on strength to my semiannual and annual risky levels of $63.35 and $68.32, respectively. I show a quarterly pivot of $56.63. (For additional reading, check out: Buy Starbucks at a Discount: Deutsche Bank.)

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.