• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Costco’s Record-Breaking Surge: Is It Time to Buy or Sell?
Stock

Costco’s Record-Breaking Surge: Is It Time to Buy or Sell?

by December 20, 2023
by December 20, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Shares of Costco (COST) rallied over 3% Monday on huge volume, fueled by last week’s strong earnings and a prominent Wall Street analyst upgrade, which raised the share price target to $700. COST is one of the strongest retailers in the industry, and the holiday season is likely to boost its sales further. That said, the price of $700 a share seems well within COST’s reach.

Running a scan for Strong Volume Gainers on Monday brought COST to our attention, and, with a SCTR score of 88.6, it seemed like an attractive prospect. But after looking at its trajectory, it becomes clear the stock was parabolic; well overbought and due for a decent-sized pullback.

Still, investors seemed ultra-bullish on the stock. And there are many fundamental reasons supporting its bullish outlook. So, as it pulls back, the challenge is to find a favorable entry point. Let’s take a look, starting with the big picture (see weekly chart of COST below).

CHART 1: WEEKLY CHART OF COSTCO. Note the parabolic rise beyond the 2022 high and the shooting star forming in the current week, indicating a reversal.Chart source: StockCharts.com. For educational purposes.

After bottoming from the 2021 COVID crash, COST saw little impact from the pandemic lockdown that followed. In 2022, as inflation began hitting customers’ pocketbooks, COST maintained a narrowing range, which steadily broke to the upside before going parabolic over the last three weeks, breaking resistance at $603 (see magenta line) and soaring into the all-time high territory. The current week shows a Shooting Star candlestick pattern, indicating a bearish reversal.

As bullish as COST’s prospects might be, it’s due for a pullback. And now it’s a matter of anticipating where COST might bounce. Let’s look at a daily chart (see below).

CHART 2: DAILY CHART OF COSTCO STOCK. Notice the scaffolding of several potential support levels. What’s tricky is that market sentiment may be more fundamentally biased, possibly resulting in a quick touch-and-go scenario even at the slightest retracement.Chart source: StockCharts.com. For educational purposes.

Last Monday’s candle saw COST hit an all-time high of 681.91, followed by an inside day. As the RSI reading indicates, it’s well within overbought territory.

Today’s session is threatening to take out Monday’s low of 661.10, and this would be the pullback bulls looking to make a sharper tactical entry might be looking for.

A break below 661.10 would find the first level of support at 627.20, which is a 38.2% Fibonacci retracement level drawn from the November low to the most recent high. The 50% Fib retracement level at 610.30 will likely serve as another support area. Both constitute potential long entry opportunities.

But perhaps the strongest level of support will cluster around the range of 590 and 600 as it marks a convergence of three potential support levels—the previous all-time high of 603, which is now resistance-turned-support, the 61.8% Fib retracement level at roughly 593, and the rising 50-day SMA which should soon reach 590.

Buying a stock that has gone parabolic typically seems like a risky endeavor, as the market’s gravity tends to strike heavily on exceedingly sharp ascents. However, the strength of COST’s fundamentals may be enough to propel the stock higher once it takes a breather and settles into more reasonable, yet still impressive, valuations. If you’re looking to enter a long position between COST’s 50% and 38.2% FIb retracement levels, 590 may serve as a final stop-loss point as it sits right above the stronger support cluster.

That may seem like a wide stop loss, but, if you are bullish, your choice entry leaves you with a bit of a dilemma, as an early entry, which may be the smart way to go, means you have to assume greater market risk, while waiting for an ideal entry at the lower price ranges risks missing the entire trade should COST continue to move higher after a modest pullback.

Set a Technical Price Alert

Setting a technical alert at these Fib levels would be helpful as you weigh your potential entry points against any market developments that may influence your decision.

To access the Technical Alert Workbench, follow these steps:

Log in to your account.At the top of any page, click on “Your Dashboard”.From Your Dashboard, click the Alerts button or the “New” button in the Your Alerts panel.In the Alerts workbench, choose which type of alert you want to create from the “Alert Type” buttons at the top left. To create a price alert, select “Price Alert” as the alert type.Add COST in the symbol box and set your price trigger.Choose how you wish to be notified and then click the Save Alert button.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

You Might Also Like
  • Top Ten Charts for August: Two Bearish Turnaround Plays
  • Silver: An Undervalued Monetary-Industrial Hybrid
  • Still BULLISH NVDA Despite DeepSeek?
  • Some Classical Technical Developments Shaping Up As Volatile Markets Gets Selective
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Social Security checks are about to change. Here’s when and how much.
next post
Democrats say polling is ‘useless’ as Trump pulls ahead of Biden in surveys

You may also like

Demystifying Tariff Impact: Essential Insights for Every Investor

April 5, 2025

When News Moves So Fast, Stocks Can Stand Still

October 16, 2023

Economic Modern Family — Home for the Holidays

November 24, 2023

Be Willing to Change Your Mind

May 20, 2023

Discretionary vs Discretionary, a Fierce Battle Under the Hood

February 2, 2024

How to Spot a Golden Mining Opportunity Using SCTR Reports

September 6, 2024

MEM TV: Simple Way to Identify a Buy Point in...

February 24, 2024

NVDA SCREAMS BULL With Earnings Breakout

February 22, 2024

Market in New Uptrend After Late-Week Rally

March 4, 2023

Week Ahead: NIFTY Stays In Technically Challanging Environment; Price Action...

May 11, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Will the Market Internals Turn More...

    March 8, 2023

    New Dow Theory Declares Bullish Phase

    February 4, 2023

    This Industry Group LOVES The Next...

    February 20, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here