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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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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?
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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