Costco has cheap gas, hot chicken and a nice chart. Here’s Scott’s take on $COST – March 15, 2022
COST
This is Scott with your Chart of the Day. I want to take a look at Costco ( NASDAQ: COST ) and not just because I got gas there today, and their take-home chickens are delicious, but this chart is looking pretty good too. As you can see, the last couple of days, we have a nice sideways base of consolidation right near that 50-day moving average, that’s the red line here on the chart.
Now, if I zoom out here you can see in the past when we have a nice little consultative base near the 50-day it then proceeds to kind of march higher riding that 8-day exponential period moving average. You can see it back here in October of 2021, you can also see it back here in June and July of 2021. We get a nice little base near the 50-day and then a march up that 8-day exponential period moving average.
And so here we are again, close to the 50-day and the stock is holding that 8-day exponential period moving average. I also like the fact that we had a nice little pickup in volume here. And so when the stock does go up, as it did on this day, it goes up oh higher than average volume. And when it pulls back as it does on this day, it pulls back on less than average volume. I like that because that tells me that the sellers aren’t overly aggressive but the buyers sure like to come in and support price near these key moving averages.
What I want to see from Costco ( NASDAQ: COST ) is a move above this little sideways base of consolidation, kind of like a low handle here, where we have a cup and then I guess you could say that’s a handle but it failed and then they brought it back up. And so here we are handling out again right close to that 50-day.
What I want to see from Costco ( NASDAQ: COST ) is a move through 543.75, coming on, once again, higher than average volume. We want to see a move higher and we also want to see it be able to hold above that daily 8 exponential period moving average. So if this does break out higher but then fails and closes below the 8-day you probably want to close that trade out because it is not doing what we expect. We expect it to kind of move higher and hold that 8-day exponential period moving average so we get one of these nice moves higher.
So that is what I will be looking for with Costco ( NASDAQ: COST ) in the coming days and I may even look to maybe get some started if it comes back to that 8-day and maybe near the 21-day, just to get a little handle on it, keep some in my account and then I can watch it and then add on a break higher. Because as you know, breakouts in this market have been a little gross. So keep an eye on Costco ( NASDAQ: COST ), watch for a move through 543.75 or a little started entry close to these moving averages.
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