Good, Good Vibes From Costco

Costco Wholesale Corporation COST has had a rough year, but since September it has been on a tear from its lows, up 22%, and after slowing down in mid-October, its feeling some good vibes again looking to break out to new highs. It recently set off one of our Vibe signals, which tells us when to re-enter into a major trend. With all of the major moving averages rising and the price action popping above the 7 day moving average, would indicate that the bulls are ready to gear up for a possible move higher.

One of the most compelling chart features was the pull back a few days ago to $154. This is a re-test of a breakout level from the middle of March and recently the high in mid-October. Re-test levels can act as major support level when stocks pullback, given Costco has been trending since the low in September bodes well for its move higher.

Typically, when we see Vibe signals, this suggests that the trend will continue, when it broke out in October it rose $12 and if this break out is like the last, it’s not out of the question to see the highs reach $169, over the next 3 weeks, but a target of around $165-$167 is more realistic.

If you are looking to trade COST to the upside having a trading plan helps. A good stopping point sets up well around $157 to help manage the risk.

As long as the market continues to move higher, Costco looks to continue to outperform.

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