Costco: Chart of the Week
We’re going to be profiling retailer Costco Wholesale Corporation; COST is the symbol. Let’s look at the chart on a daily basis and on a weekly basis and see what we’ve got here.
Daily chart has been bullish since March
As you can see the stock has been extremely bullish for the past several months. Once it launched at the end of May, right after earnings, you can see this big shot right up here, and it has not looked back. Look at that trend channel it has been in making higher highs and higher lows. The cloud is strong in some of the other indicators we are showing here.
Look at the strength in the accumulation distribution – tot just since May but since March when the stock was well under $475. It’s been accumulating investors. Big institutional money has been coming into the stock. We can also see this is apparent with the Chaikin money flow. You can see how strong and healthy that’s been.
We have a very solid MACD buy signal. It’s been on since a crossover in late May.
We do have some resistance coming up at around this level – $542 – $543. Every single time it comes back to test the moving averages, it comes right back up again.
Check this out – the last couple of times we came down and nearly tested the 20 day moving average, which is this dotted line. It came back down a couple of times and repelled it making higher highs and higher lows. July 3 was almost an outside day. It started down and ended up closing at the highs of the day. That is a signal of strength for the stock.
Weekly chart shows a chance of getting to old highs
Let’s look Costco on the weekly chart. This is more of a wide-out view of Costco. You can see the weekly MACD has been on a buy signal since the early part of March. We made a series of higher lows. We do have lower highs over here. Once we get over that September high – let’s call it $564 – we are about 25 points away from that now – once we get over that we have a chance of getting to the old highs right near $600.
This is another extremely bullish looking chart for Costco. Look at the TDI (Traders Dynamic Index) right in the middle here, which is how relative strength moves in tandem with the bollinger bands. It’s on a buy signal too.
Stochastics momentum index is overbought and it can stay overbought for a while. You can see it happened back here in 2021. Stock made a huge run over here right after the stochastic momentum indicator went overbought. Just because it’s overbought doesn’t mean anything until it starts breaking down and going lowers.
We are real positive on Costco. I have quite a few calls in the stock. This is as holiday period when Costco gets a lot of interest with shoppers. I was at the store just about a week ago, and it was packed.
That’s Costco – COST.
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