Costco Makes a Lower High

Costco ran to new highs in late December, but this year it’s been under pressure.

The warehouse retailer slid 11 percent in January – its sharpest monthly drop since December 2018. It then retraced about half the decline to make a lower high last week. Notice how the high not only consisted of an abandoned shooting-star candlestick. It also occurred at the 50-day simple moving average (SMA).

Speaking of the 50-day SMA, this chart includes our custom script Moving Average Speed highlighting its direction and rate of change. The last time it fell like this a year ago, COST had a deeper retest.

Given that history and the stock’s healthy gains in later 2021, some traders may view the recent price action as the start of an ABC correction. Will they also focus on the October low around $440 as the next likely support?

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Candlestick AnalysisMoving AveragesSupply and Demand

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