Costco Wholesale ( COST) is expected to release their latest quarterly results Thursday after the close of trading. Let's check out the charts of this membership-only big box retailer. 
In our December 13 review of the charts of COST we wrote that "Traders should continue to hold their remaining long positions and keep their stops at $505 for now. The round number of $600 and then the $675 area are our potential price targets." Traders would have been stopped out of longs in January when prices turned lower.
Let's check on the charts again ahead of their earnings figures. We visited a local store in our new neighborhood the other day and the place was busy with a capital B. In an unscientific survey of shoppers I got the sense that consumers are being more cost conscious than ever.
In this daily bar chart of COST, below, we can see that prices made a low in January followed by a bounce and a recent retest of the January nadir. Prices have been testing the declining 50-day moving average line. The slower-to-react 200-day moving average line has a positive slope and intersects around $470.
The On-Balance-Volume (OBV) line shows weakness from December to the end of February. Since late February we can see a slight improvement in the OBV line. The Moving Average Convergence Divergence (MACD) is just below the zero line and close to a new buy signal.
In this weekly Japanese candlestick chart of COST, below, we can see a bottom reversal pattern in January and a bullish hammer in February. The lows in January and February got close to the rising 40-week moving average line so one might consider them to be buying opportunities.
The OBV line has been in a positive trend the past three years. The MACD oscillator is pointed down but it has been narrowing for several weeks.
In this daily Point and Figure chart of COST, below, we can see an upside price target in the $641 area.
In this weekly Point and Figure chart of COST, below, we can see a potential downside price target in the $370 area. A trade at $540 is likely to turn this chart more positive.
Bottom line strategy: I have no special knowledge of what COST is going to report to shareholders. I can report that a very limited and unscientific "channel check" of one store gave me the feeling that rising prices for food and other items was going to send more customers their way. The charts of COST look positive and traders could go long COST ahead of earnings risking to $490.
