Chart of the Day: Here's How Costco Lines Up Before Earnings
The company will release quarterly results Thursday, and this is what the chart is telling us.
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It is hard to argue the success of Costco (COST) , one of our most favored companies in the Pro Portfolio. Often we see a huge buildup in the stock before an announcement such as earnings, which will be released after the close of trading Thursday (9/25). But the excitement is tempered, at least for this earnings report. Perhaps investors/traders are a bit more guarded with potentially negative news related to tariffs, or maybe Costco shoppers are taking a step back and waiting for prices to fall further.
Whatever the case, the chart is not giving us much information about where the stock is headed. To be sure, a nice basing period is healthy but eventually the bulls would need to step up and start buying the stock. There is little room for error at this point for Costco, which trades at a premium to its peers (usually has).
The chart shows good support at current prices but Costco is struggling to push higher. That could be problematic if investors do not find anything appealing in the company's report or outlook. The support held firm (at $930-935) for months but if that fails to hold there is plenty of potential downside to go.
For now, we'll pass on guesstimating that target. ADX is weak, which means the trend is very slow; clearly we see that from the top pane. Money flow is near the zero line, there's not much momentum here and stochastics are bending lower.
It's a wait and see time for Costco. A break above $990 would be very bullish and could lead towards new all-time highs.
We like Costco in TheStreet Pro Portfolio and rate it a One, or "buy at anytime."
At the time of publication, TheStreet Pro Portfolio was long COST.
