Wholesale retailer Costco (COST) is set to report its latest quarterly figures after the close of trading Thursday. In our July 26 review of the charts we turned bearish on shares of COST.
Let's check the position of the charts and indicators again as we await the earnings report.
In the daily bar chart of COST, below, we can see that the shares have turned down from a high in August. COST is below the cresting 50-day moving average line and the declining 200-day line.
The On-Balance-Volume (OBV) line shows us weakness from the middle of August and tells us that sellers of COST have become more aggressive with heavier trading volume happening on days when the stock closes lower. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in sell territory.
In the weekly Japanese candlestick chart of COST, below, we can see the past three years of price movement. The shares look like they have made an unorthodox head and shoulders top formation. Prices are trading below the bearish 40-week moving average line.
The weekly OBV line is turning down from a double top in April and July. The MACD oscillator is weak and close to a test of the zero line.
In this daily Point and Figure chart of COST, below, we can see a downside price target in the $443 area.
In this weekly Point and Figure chart of COST, below, we see a possible target of around $421.
Bottom-line strategy: I have no special knowledge of what COST will report to shareholders Thursday evening but the charts and indicators are pointed down. I would avoid the long side of COST.
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