• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Daily Swing Trade Archive
    • Income Seeker
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

The Charts of Costco Are Looking Weaker With a Quantitative Downgrade

Traders and investors should probably look elsewhere for stocks to trade from the long side.
By BRUCE KAMICH
Jan 17, 2019 | 12:28 PM EST
Stocks quotes in this article: COST

Costco Wholesale (COST) was downgraded to "Hold" by our quantitative service so it prompted me to check out the charts and indicators of COST.

In this daily bar chart of COST, below, we can see a rally from early April to a zenith in early September. From that September peak COST made lower highs until December when it declined $45 in a hurry. COST broke below the rising 200-day moving average line. The shorter 50-day line has had a negative slope since the middle of November and it is now close to crossing below the 200-day line for a possible death cross.

The daily On-Balance-Volume (OBV) line shows a peak in early November and its decline tells me that sellers of COST have been more aggressive.

The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early January for a cover shorts buy signal. It looks like this indicator has begun to narrow again towards another sell signal. The area above $220 is likely to act as resistance.

In this weekly bar chart of COST, below, we can see that prices are below the still rising 40-week moving average line. The decline in price to $190 pushed halfway into the $200-$180 support area and is not a sign of strength. If COST found buyers around $200 it would have been more constructive.

The weekly OBV line shows weakness the past two months.

The MACD oscillator is moving below the zero line for an outright sell signal on this longer time frame.

In this Point and Figure chart of COST, below, we can see a downside price target of $148 being projected.

Bottom line strategy: It looks like COST is stalling below the rising 200-day moving average line and well short of resistance that starts around $220 (the lows of October and November). Traders and investors should probably look elsewhere for stocks to trade from the long side. COST could trade lower in the weeks and months ahead.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Economy | Investing | Markets | Stocks | Technical Analysis | Trading | Food & Staples Retail | Retail

More from Investing

How Many Times Are We Going to Rally on a China Trade Headline?

James "Rev Shark" DePorre
Feb 15, 2019 4:23 PM EST

The answer is every time there is a headline.

Chart of the Day 2: North America Is the Big Battleground for Pepsi and Coke

Kevin Curran
Feb 15, 2019 2:50 PM EST

Pepsi's clash with Coke is most pivotal closer to home.

Jim Cramer: Don't Underestimate the Importance of a China Trade Deal

Jim Cramer
Feb 15, 2019 2:48 PM EST

Today's rally is all about how the world's economies could return to sustainable global growth.

Chart of the Day: Can Pepsi Push Past La Croix For Seltzer Sippers?

Kevin Curran
Feb 15, 2019 2:19 PM EST

is La Croix a conqueror or is Pepsi planning a coup?

Why Nvidia Might Be Able to Deliver on Its Bold Guidance - Tech Check

Eric Jhonsa
Feb 15, 2019 1:26 PM EST

Recent game reviews bode well for Nvidia's second-half gaming GPU sales, while heavy data center spending by cloud giants bodes well for its server GPU sales.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 04:01 PM EST KEVIN CURRAN

    Pepsi Kicks off 2019 on a Positive Note

    Pepsi's earnings may not have been immaculate, but...
  • 10:08 AM EST BOB LANG

    Rolling up the Arista

    on Tuesday this week I posted a trade idea here an...
  • 08:11 AM EST KEVIN CURRAN

    Pepsi Earnings Call Notes

    As my first article is in edit, here are some sele...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2019 TheStreet, Inc., 14 Wall Street, 15th Fl, NY, NY 10005

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login