Bullish Outlook: Costco Wholesale (COST) Stock Trading at a Wholesale Price
Costco Wholesale Corporation’s stock (COST) has seen better days. The past two weeks have seen the stock pullback sharply along with the rest of the market. But we maintain that COST continues to be a strong buy, and the technicals clearly support that conviction. The company missed slightly on its last earnings release back in early October, and its stock took somewhat of a beating for it. But it’s now (or very soon) poised for bigger and better things as the stock looks to resume its entrenched bullish trend on multiple time frames. The next earnings release is just around the corner on December 13 (after market close).
From a technical analysis perspective, as mentioned, COST continues to trade within strong uptrends on multiple time frames. The latest pullback has placed the stock at a potential triple bottom pattern around the key $217-218 support area. Price is also around the lower border of the medium-term, 100-day linear regression channel, which is clearly rising. Momentum oscillators are at or near oversold, which suggests an exhaustion of downside momentum within the prevailing bullish trend. In short, most technical indications are pointing to a likely resumption of the overall uptrend.
The Technicals Rating
The Technicals gives COST a bullish rating of 8 (on a scale of 1-10, with ’10’ being the most bullish and ‘1’ being the most bearish). Below are some of the key technicals for COST, as well as other relevant information that paints a bullish picture of the stock:
- Price Position vs 200-Day SMA: +4.00% (above) – BULLISH
- Position vs 50-Day SMA: -5.24% (below) – BEARISH
- Position vs 20-Day SMA: -5.09% (below) – BEARISH
- 200-Day Trend Slope (Linear Regression): BULLISH
- 100-Day Trend Slope (Linear Regression): BULLISH
- Stochastics (14,3,3) Level: Oversold – BULLISH
- RSI (14) Level: Near Oversold – BULLISH
- Position in Bollinger Bands: At Lower Band – BULLISH
- Sector (ETF: RTH) Long-Term 200-Day Trend: BULLISH
- Sector (ETF: RTH) Medium-Term 100-Day Trend: BULLISH
- Market (S&P 500) Long-Term 200-Day Trend: BULLISH
- Market (S&P 500) Medium-Term 100-Day Trend: BEARISH
- Short Interest Ratio: 1.20% – BULLISH
- Analysts’ Mean Target Price: $244.61 (far above current price) – BULLISH
- Last Earnings Reaction: Sharp Gap Down – BEARISH
Overall The Technicals Rating for COST: TTTTTTTTTT (8 out of 10) – BULLISH
IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Past performance is not indicative of future results. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.
Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.
Chief Market Strategist at The Technicals
With more than two decades of experience as an equity analyst for several major research firms, Don has covered individual stocks (both technically and fundamentally) across a wide variety of sectors and industries, including tech, financial, and retail. He has been quoted regularly in key financial media like Bloomberg and Reuters. Contact Don