Chart of the Day: Costco Looks Poised for Even Higher Prices
The stock has been a 'monster mover' and may take a breather soon, but that afford an opportunity.
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Without question Costco COST remains the envy of the retail contingent. And the stock has been on a roll since breaking out in early May.
Costco stock has risen 120 points, or 16.5%, in about five weeks; volume trends are wildly bullish as the shares push to new highs on a daily basis.
Since closing at a new high around May 13 the stock has been a monster mover, and now sits at an overbought condition. Certainly Costco can continue to run higher but traders are likely to take some profits along the way, too.
Notice the candles in the top pane of the chart are mostly blue. This indicates a strong bullish condition based on the GoNoGo composite of indicators. Parabolic SAR (stop and reverse) is also bullish, providing good support as long as momentum holds firm.
Moving Average Convergence Divergence (MACD) looked as if it would turn down last week but it did not and remains on a powerful buy signal. Money flow (bottom pane) remains bullish, too. Stochastics are overbought and in a few days if Costco remains elevated this will be embedded, which means dip buyers will be active.
On a pullback, potential entry points for newer members could be at the $812 level and below there at $792.
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At the time of publication, TheStreet Pro Portfolio was long COST.
