This is a Costco (COST) stock chart review. This was a request from a Trendy Stock Charts member. Requesting a stock analysis on any publicly traded company is one of the benefits of a Trendy Stock Charts membership.
If you are not familiar with Costco (COST), it is a "big box, low cost retailer", similar to Walmart (WMT).
Costco (COST) Stock Chart Review
This first chart for Costco (COST) is a 10 year monthly candlestick chart. It captures a long-term uptrend that has been in place over that time period.
Most importantly though, I've pointed out a Bearish Engulfing candlestick pattern on the chart. That is the main reason I started with this 10 year monthly chart. This Bearish Engulfing candlestick pattern does not signal "higher prices ahead". Rather, it is quite the opposite.
With the amount of selling volume associated with th bearish signal, COST's share price appears to be starting or about to start a lengthy correction process.
With a 10 year main supporting trendline around the $140 area, it appears that a little more patience is required before any scale-in purchase should be made. Purchasing shares to go long while the MACD Histogram is showing increasing selling momentum is not a sound investment or trading strategy.
I've identified 3 potential scale-in support areas to purchase shares for Costco (COST). Let's see if some shorter-term perspectives will help provide any insight as to which support area may be best to start the scale-in process to go long.
COST - Shorter-Term Review
This next chart is a 1 year monthly candlestick chart for Costco (COST). I wanted to dive in and look at shorter-term support areas since COST's share price has flashed signs of a potential consolidation period.…...
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Support areas for Costco's share price are analyzed. These support levels can be used as buying areas to purchase shares and go long the stock. Longer-term trends and short-term term chart signals are also reviewed.
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