In our last review of Costco's (COST) charts on May 25 we wrote that "My local Costco store in New Jersey has been busy every time we have gone shopping or stopped over for gas. This is a very limited and unscientific analysis/channel check but it suggests that the stock price could head still higher assuming the upcoming earnings report is not disappointing."
The price of COST made a new 52-week high on Wednesday, so this is a good time for another review of the charts.
In this daily bar chart of COST, below, we can see that prices are back up to the November highs. COST is trading above the rising 50-day moving average line which was recently tested. The slope of the 200-day moving average line is also positive.
The daily On-Balance-Volume (OBV) line has moved up from its early March low but remains (for now) below its December peak. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and turning upwards for a new outright buy signal.
In this weekly Japanese candlestick chart of COST, below, we can see that prices have made a strong advance over the past three years. COST is trading above the rising 40-week moving average line. The weekly OBV line shows some slight weakness the past seven weeks but the longer-term pattern is positive. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of COST, below, we can see the new high on the chart but also a $532 price target.
Bottom line strategy: Traders could go long or add to longs at current levels. Risk to $369. The $532 area is our price objective.
(Costco is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells COST? Learn more now.)
