Short COST on throw-overThis 120m chart of COST shows a pattern that I trade frequently - the ending diagonal. It is a setup that, when identified correctly, can result in sharp moves lower as the stock breaks out of its impulsive sequence. I recently placed a similar trade on INTC that is working well.
As COST grinds higher in a converging wedge, it looks to have "thrown-over" trendline resistance. This is common in ending diagonals as price makes one final push before breaking lower through the bottom of the channel. Initiating a short position at 207.50 for a move back toward 180. A sustained rally through 215 will cause me to reevaluate the trade.
