Membership retailer Costco Wholesale Corp. (COST) has struggled to rally in recent months but now it looks like the charts and indicators have strengthened.
Let's check the charts and plot a new strategy for this Action Alerts PLUS holding.
In the daily bar chart of COST, below, I can see that the shares are now trading above the rising 50-day moving average line and above the declining 200-day line.
The On-Balance-Volume (OBV) line shows strength from early March as buyers of COST have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In the weekly Japanese candlestick chart of COST, below, I can see a promising-looking setup. The shares are trading above the bottoming 40-week moving average line.
The weekly OBV line shows a rise for the past three months or so. The MACD oscillator recently turned bullish with its move above the zero line.
In the daily Point and Figure chart of COST, below, I can see a potential upside price target in the $603 area.
In this weekly Point and Figure chart of COST, below, I can see the same $603 price target.
Bottom-line strategy: The charts of COST looked bearish on April 6 but have reversed direction. Traders could go long COST at current levels risking to $505. The $603 area is my price target for now.
(Costco is holding in the Action Alerts PLUS member club . Want to be alerted before AAP buys or sells COST? Learn more now. )
