Discount retailer Costco Wholesale (COST) has been steadily climbing back up the rankings in the SIA NASDAQ 100 Index Report for about a month now, driving up out of the red zone and returning to the Green Favored Zone for the first time since May. Yesterday, Costco finished in 25th place, up two spots on the day and up 38 positions in the last month.
Costco Wholesale (COST) staged a major breakout last week. Back in May, a selloff had been contained above a long-term trend support line which is currently near $400. Since then, higher lows between $410 and $490 built a bullish Ascending Triangle base. Last week, the shares broke out of the triangle, broke through their 50-day average and regained $500, all combining to signal that a new recovery trend is underway.
A measured move from the base suggests that next potential resistance could appear near $570, followed by the previous peak near $600. Support has moved up toward the 50-day average near $475 from uptrend support near $450.
After reaching a new all-time high above $600.00 in April, Costco Wholesale (COST) staged a substantial retreat, falling 37% before finally bottoming out near $415.00 in May. Since then, the shares have been recovering lost ground, completing a bullish Double Top breakout this month and on Friday it closed back above $500.00, which confirmed the start of a new recovery trend.
A horizontal count suggests possible initial resistance near $536.40, followed on trend by previous column highs near $558.15 and then $569.40. Initial support appears near $480.80 based on a 3-box reversal and a retest of a recent breakout point.
With a bullish SMAX score of 6 COST is exhibiting strength against the asset classes.
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