• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock The Costco Stock Surge: What You Need to Know Right Now!
Stock

The Costco Stock Surge: What You Need to Know Right Now!

by February 9, 2024
by February 9, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Costco (COST) stock has soared into uncharted heights, leaving its last all-time record in the dust. With a little under a month before the company is scheduled to open its earnings book, you’d think investors are expecting something of a blowout report, judging from the price action.

Costco Outperforming the Broader Market and the Staples Sector

CHART 1. WEEKLY CHART OF COST. Note COST’s strong outperformance in technical ranking and relative to a few key benchmarks.Chart source: StockCharts.com. For educational purposes.

Costco’s SCTR score crept up to 91, which it hasn’t seen since 2022, when it last broke record-high territory. This indicates that several technical indicators are flashing a bullish signal, supported by the “full sail” position of its 50-week and 200-week simple moving average (SMA). Strong bullish momentum? It sure appears so.

Plus, COST, on a longer-term scale, has outperformed the broader market ($SPX) and its sector, Consumer Staples, quite handsomely, clocking in a 69% and 77% gain over those respective benchmarks. As an aside, COST is among the several large cap stocks that came up on Thursday’s New All-Time Highs scan, on a day when the big three indices barely budged.

But is there sufficient tailwind to maintain its skybound momentum? One way to gauge this is to add an indicator, such as the Money Flow Index (MFI).

Plotting the Money Flow Index on SharpCharts

To add the MFI:

From Your Dashboard, click on Charts & Tools at the top left navigation bar;SharpCharts is the top left selection; enter your ticker symbol there;In the SharpCharts Workbench, select the Money Flow Index from the Indicators menu to view the indicator.

What’s Happening to the Tailwinds?

CHART 2. DAILY CHART OF COST. Note that all points to continued bullishness except for the MFI, which started showing a decline in buying pressure in December.Chart source: StockCharts.com. For educational purposes.

A quick recap: The Money Flow Index (MFI) is essentially a volume-weighted Relative Strength Index (RSI). When prices go up, more money flows in (buying pressure), and when prices go down, money flows out (selling pressure). The MFI is a momentum oscillator that uses volume and price movements to spot potential turning points and extreme price levels.

You can see COST rising steadily with a slight pullback. Meanwhile, the 50-day, 100-day, and 200-day SMAs are fully extended, indicating a strong uptrend.

In contrast, however, the MFI is declining (see blue arrow) from its last “overbought” level in mid-December, as price continued to rise. This divergence indicates that prices are going up, despite buying pressure declining. In short, a pullback is due, and the most recent candle hints that the market may also be getting the message.

Still, it’s too early to confirm that this is the start of a pullback. Typically, Fibonacci retracement levels would be helpful in measuring the pullback and determining a few good long entry points, but this isn’t possible just yet, as the pullback hasn’t been confirmed.

So instead, if you’re bullish on COST, set a price alert at $675, its last swing low (see blue horizontal line).  A break below this level would likely mean prices are heading further down. And from there, you’ll have several potential entry points:

A pullback confirmed would be the green light to use StockCharts’ Fib retracement tool, which can be used to identify an entry point;Look at the 50-day or 100-day SMAs for a potential bounce (especially if any enter confluence with other market support levels); and/orSet your sights at $640 (see red horizontal line), the next swing low, for a potential entry.

The Bottom Line

The StockCharts’ New All-Time High scan engine, coupled with the SCTR ranking, is a valuable tool for identifying strong stocks to trade. Of course, “all-time high” can often mean “too high” or overbought. Indicators like the MFI, among others, can help you understand whether there’s enough momentum to support the stock’s current trajectory or if it’s due for a pullback. Oftentimes, stocks hitting a record high are due for a pullback, and that’s where you select the technical tools to measure the pullback and identify potential entry points.

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
  • MEM TV: Wait For This Before Getting Back In
  • Were There Technical Warnings Ahead of the Regional Banking Crash? Oh, Yeah!
  • Is the Trump Rally Like the Reagan Rally?
  • Top Ten Charts for August: Two Magnificent 7 Stocks Worth Watching
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Your Questions, Answered! Price Gaps, Bull Flags, Inverse Patterns, and MORE
next post
Biden official claims special counsel report was ‘Comey moment’

You may also like

Market’s At RISK in The Mega Cap Bloodbath!

October 27, 2023

Stock Market Rebounds: After Volatile Week Market Beats Bearish Pressure

August 18, 2023

Escape the Chaos: Discovering the Key to Tackling Market Uncertainty

January 10, 2024

Watch for These Signs of a Bottom As Market Breadth...

October 2, 2023

Surging Trucks Are Driving The Industrials Sector Higher

July 26, 2023

DP Trading Room: Tariff Trepidation

February 3, 2025

Market Research and Analysis – Part 5: Drawdown Analysis

April 11, 2024

GNG TV: US Equities Offer Diversified Opportunities

April 6, 2023

5 Simple and Powerful Uses for Moving Averages

June 12, 2024

Top 5 StockCharts Features to Use Every Day, Grouped n’...

February 24, 2023

    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

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

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

      June 27, 2024 2,919 views
    • 3

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

      August 9, 2024 2,607 views
    • 4

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

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,450 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

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

      June 25, 2024
    • 2

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

      June 27, 2024
    • 3

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

      August 9, 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

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    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

    What Seasonality Charts Reveal About the...

    November 12, 2024

    Crude Oil Collapses – Will It...

    March 16, 2023

    Is FedEx’s Long-Term Uptrend in Jeopardy?...

    December 27, 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