Costco Wholesale Corp - (COST) - July 24, 2023
After underperforming its peers in late 2022, discount retailer Costco Wholesale (COST) has been climbing back up the rankings in the SIA S&P 100 Index Report since January starting in the red zone. On Friday, COST returned to the Green Favored Zone for the first time since November, finishing in 26th place, up 12 spots in the last month.
This three-year chart in Costco Wholesale (COST) shows that a year long advance up to the April 2022 peak was followed by a short, sharp selloff, confirming the old saying “Stocks go up like an escalator and down like an elevator”. Costco then spent over a year in consolidation mode, forming a textbook Symmetrical Consolidation Triangle of higher highs and higher lows.
In May, this standoff was resolved by the bulls once again regaining the upper hand and long-term accumulation resuming. Since breaking out of the triangle, COST has been consistently climbing, recently regaining the $550.00 level for the first time in a year.
Initial upside resistance may appear at the spring 2022 peak just above $600.00, followed by $670.00 based on a measured move. Initial support appears at the 50-day moving average near $520.00.
A year long rally in Costco Wholesale (COST) shares from April 2021 to April 2022 was followed by over a year of consolidation from April 2022 to June 2023. Over that time a Symmetrical Triangle of higher lows and lower highs formed, a pattern that indicated an impasse between bulls and bears and is frequently resolved in the previous direction of travel
Last month, COST broke out to the upside, completing a bullish Double Top breakout and signaling that the shares primary uptrend has resumed. As accumulation continues the current advance has extended into a bullish High Pole and completed a bullish Spread Double Top breakout.
Upside resistance tests appear near $607.55, where a horizontal count and the April 2022 peak converge, followed by $684.20 where vertical and horizontal counts align. Initial support appears near $508.40 based on a 3-box reversal.
With a perfect SMAX score of 10, COST has been exhibiting strength across the asset classes.
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