COST- Watching for a breakdown Short trade Overall industry breakdown makes COST a potential candidate for short. In the technical side it is rolling over from a double top and broke Upward trend. Money-flow is heading down. We think it can decline to 140 area.
You can check our detailed analysis on DNAI in the trading room/ Executive summery link here-
www.screencast.com
Time Span: 18:00”
Trade Suggestion Date: Aug 26th
Trade Status: Pending/Watchlist
COST
COST (COSTCO) NASDAQ:COST
05JUN16 - Entry criteria:
1. Short Position - If we get confirming bearish candlestick formations at the stop of the channel supporting by weak market performance over the week, potential to enter short and ride to $137.
2. Long Position - Potential to trade this long if a breakout forms out from the downward price channel and a base of support at $152.
THIS WEEK'S OPTIONS EARNINGS PLAYS -- COSTFor all practical purposes, this quarter's earnings season is all but over.
However, there is one last play I might do and that is in COST, which announces earnings on Tuesday after market close.
Currently, it's implied volatility rank is 58 and its implied volatility is 26. Generally speaking, I like to see the rank in the 70% percentile, and this isn't quite there, but this is one of those underlyings that just never gets that volatile -- its IV has been between 20 and 30 or so for the past 90 days.
I'll look to put on a play before NY market close on Tuesday, and I'll post a play (most likely an iron condor given the price of the underlying) some time during Tuesday's NY session.
Preliminarily, this looks like the approximate setup I'll use, although tweaking may be required as price moves on Monday and Tuesday:
March 11th 137/142/157.5/162.5
Probability of Profit: 66%
Max Profit: $99/contract
Buying Power Effect: $401/contract
DATA VIEW (NOT A FORECAST): US DEBT COST IS AT HISTORIC LOWSDue to continuous demand for US Treasury securities over the last 30 years and due to global deflationary pressures, triggered by globalization (cost optimization of global businesses) - the yields of 10 and 30 year Notes continue to decline along their long term descending trend line
The result of such a development - is the current cost of US debt is lower than ever, which in turn allows larger external debt to be held by the States.
As one can see in Monthly Treasury Statement - Net interest is the lowest type of Outlays in the US Budget
higgs.rghost.ru
(scource: www.fiscal.treasury.gov)
COST break up of consolidationCostco caught up some buying momentum after it broke up its consolidation resistance at $116.60 and had 2 days of follow through. Price found top at $126 and was sold off to $110 which acts like major support for this stock.
It was out of play for couple of months but for now if it will hold above breakout point it will keep active traders attention.
Higher lows and higher highs tell us that buyers are in control. Next important resistance is at $120 which could be our target.