Top stock picks for the next years No. 4 Costco WholesaleI am publishing a series of the best stocks with the highest growth rates that I expect over the next few years. Today with the Costco share with a target price of 1024$
COST trade ideas
COST Symmetrical TriangleNASDAQ:COST
Costco Wholesale Corporation is one of the most successful companies in the US. Costco investors have seen a return of 453% over the past 10 years, while the S&P 500 has moved roughly 206% over the same period.
Despite the impact of inflation, Costco has continually offered lower prices relative to their competitors, yet their net margins are 2.65%, the highest they have ever been.
Technical patterns suggest a symmetrical triangle pattern on the weekly timeframe, which could indicate a retracement to all time highs ($612.27). A breakout and rally is very plausible, with a potential price target of $700.
Looking for a counter trend pullbackCOST has one of the cleaner structures in the market and is a great long term ticker, as well as a shorter term speculative ticker. Ultimately, looking for a wave 4 of 3 pullback toward the .764 extension around 586, which is also heavily supported by the volume profile. Short term bearish / longer term bullish.
The Ghost of Charlie Munger Drives $COST to new highCostco is up 15% since Munger passed away on November 28th.
Market cap rose from $255B to $300B.
Supernatural move. ;)
COST Costco flap and poleHey folks
Back with my signature flag and pole. Not into using crazy indicators here but just pure tech analysis.
COST giving a weekly flag and pole with divergence on macd.
Wait for 8-9 weeks for the next earning season and see it pop. Feel free to checkout my previous ideas and see how they faired.
Leave a comment and a subscribe for more ideas
Cheers
A
COST - seasonality and special dividendsI recently posted about the potential to take advantage of seasonal weakness for $NASDAQ:COST. I'm embarrassed to say that I had lost track of them being overdue to offer a special dividend. Since 2015 they have offered a special dividend every 2-3 years.
Let's look at how the special dividend announcements have influenced sentiment and interacted with seasonal behavior. Recall that COST sees November as an incredibly strong month, and December through February and August as weaker months. But what happens when there is a special dividend?
February 2015 - $5 special dividend
Price surged $13 (9%) between announce and ex-dividend date
Dec-Feb period ended 5% higher
After payment price remained ~$2 higher than close of the announce date until Aug
May 2017 - $7 special dividend
In between seasonal periods. The prior 2016-2017 Dec-Feb had ended higher.
Price increased $10 (6%) between announce and ex-dividend date
Price flattened and then dropped after ex-dividend date
Price increased briefly after payment and then gapped down until November
The following 2017-2018 Dec-Feb season ended slightly higher
December 2020 - $10 special dividend
Price increased $13 (9%) between announce and ex-dividend date
Price dropped after ex-dividend date and was flat by payment date
Dec-Feb ended $57 (14.7%) lower
December 2023 - $15 special dividend
December was trending higher prior to the special dividend announcement
Price has increased $19 (3%) from announcement
There are currently 7 trading days until ex-dividend date
This is obviously a very small sample size. In every situation the price has increased to a level greater than the special dividend in between announcement and ex-dividend date, but corrected by payment date, or shortly after. The special dividend that was announced in the middle of the year saw the least impact on seasonality. The February 2015 special dividend saw a less common strong Dec-Feb period, while the December 2020 special dividend was followed by a weaker than normal Dec-Feb period.
I'll conclude that a conservative approach is to take profit in between announcement and ex-dividend and continue to look for an opportunity to capitalize on potential seasonal weakness in the coming months.
$COST weekly breakoutNASDAQ:COST weekly breakout post earnings. Will look to add if it pulls back to test breakout zone.
For the believer of GOD (Allah)Please it is not a financial advice
I'm sharing my estimated price action
Best of luck,
Your fellow brother 😁
$COST Keeps the Momentum going Despite Market Volatility Despite market Volatility NASDAQ:COST is exhibiting a bullish bias based on the following indicators:
Price Momentum
COST is trading near the top of its 52-week range and above its 200-day simple moving average.
NASDAQ:COST is trading above all of its moving Averages indicating a Bullish Bias.
NASDAQ:COST 50-day Moving Average is above the 200-day moving average also indicating a Bullish Bias.
NASDAQ:COST 50-day Relative strength index is 63.59% higher than the 100-day RSI at 58.84%.
What does this mean?
Investors have been pushing the share price higher, and the stock still appears to have upward momentum. This is a positive sign for the stock's future value.
COST - heading into seasonal weaknessNASDAQ:COST is a core holding of mine and one that I use technical analysis to continue building. I've reported multiple setups to build a cost position and recently shared the strong seasonal outlook for November.
We have earnings after the close on 12/14, a quad withing on 12/15, and a history of seasonal weakness between December and March. I'll take this opportunity to sell some of the position into strength and look for opportunities for additional accumulation over the next 3 months.
Note on the daily chart that we're just above a range that I targeted on the breakout of a descending wedge. We can also see that price has pivoted in alignment to the fib time zones and that the next one is 12/15 (day after earnings and on quad witching).
On the weekly chart we are at the top of a measured range, which has typically signaled the start of a secondary downtrend.
Costco still eager to push up ahead of earningsShares in Costco Wholesale Corp (symbol ‘COST’) reached 18-month highs in the last fortnight amid ongoing strong sales. Recent general positivity in stock markets comes mainly from the likelihood that the Federal Reserve has reached its terminal rate for this cycle and might start to pivot from the second quarter of next year.
Costco’s earnings report for the financial quarter ending in November is expected on Thursday 14 December after hours. $3.44 is the consensus EPS: the 15 estimates range from $3.25 to $3.66. One estimate was revised down in the last four months.
‘One of the negatives for buyers of Costco’s stock is that, considering the sector, its dividend history doesn’t compare favourably with EPS,’ said Michael Stark at Exness. ‘The company’s fundamentals, in terms of revenue, sales, memberships and other numbers, look good, but PE around 40 raises some concern over valuation.’
A double top is visible on the chart; however, this pattern has not completed yet so acting based on it would usually be risky, especially in the runup to earnings. As above for Broadcom, $600 for Costco is an important resistance as a round number which might resist testing without a significant new driver.
The long uptrend in 2023 remains valid for now, but buying the CFD just below an all-time high isn’t a typical approach except for short-term traders attempting to exploit a potential breakout. A retest of the area around $575 might give a better entry for buyers, but that depends on how shareholders perceive the earnings report.
Possible strangle on COSTThis is a "copper condor" not an iron one.
Creating 2 debit spreads that one pays off well IF COST gaps nicely and breakout out of this triangle in a nice fashion?!?!
COST - Short Position Despite the negative news, market has its own mind. Its been only going higher.
COSTCO seems to have ran out of gas, and shorts may be taking over soon. The idea is to get in as early as possible, and get out when the rest start to jump in.
Shorting COST to the $530 area. Since risk management is key, and COSTCO is an expensive stock, Iam going to purchase a debit spread OTM mid Nov expiry, that is suitable to my risk tolerance.
best of luck.
Costco (NASDAQ:COST) Indicating Positive Sign of a Bullish Trend
Costco wants your loyalty
To some extent, Costco's sales will ebb and flow along with the economy. That's natural for a retailer. But what won't change over the next three years is the company's focus on keeping its customers happy, because that supports an important income stream. And you can keep tabs on that by watching its membership renewal rates.
Costco's Growth
Costco's growth opportunities reside in increasing membership by incremental amounts and opening new stores. Comparable-sales growth is strained right now due to inflation, but the company typically demonstrates mid- to high-single digit percentage comparable sales growth. Membership increased 7.9% year over year in the fiscal fourth quarter (ended Sept. 3), and membership fee income increased as a percentage of sales from 1.88% to 1.95%. It will also likely raise its annual membership fee, which stands at $60 for a basic membership, sometime soon. That will lead to an increase on the bottom line.
If you own this stock, or are considering buying it, making sure that Costco generates consistently high renewals may actually be more important than monitoring its product sales.
Price Momentum
COST is trading near the top of its 52-week range and above its 200-day simple moving average.
What does this mean?
Investors have been pushing the share price higher, and the stock still appears to have upward momentum. This is a positive sign for the stock's future value.
COST - king of November seasonalityNASDAQ:COST is putting amazing November. It has ended 10 of the last 10 Novembers higher with an average return of 5.5%. And it has ended 18 of the last 20 higher, with one of the down years being the great recession.
Observe the repeated behavior within the primary uptrend on the weekly timeframe. We have a primary uptrend channel with a series of secondary downtrends. Breakouts from the secondary downtrends take a proportional measured move up. A replay of this trend would land between $615-630.
On the daily timeframe todays price action takes a decisive move away from the downtrend and back into the uptrend. The blue range between $596-611 is a reasonable area to expect overhead resistance in the near term.
Any movement below $570 should signal caution and a close below $560 would invalidate near term continuation.
Costco the case for higher highs maybe probableHI guys. This is an analysis thread to assess the technical developments found in Costco. I will layout some general findings on the macro scale, then update as new developments proceed in the technicals for COST. The purpose is to provide unbiased TA opinions, where i give both bearish or bullish cases depending on facts in charts to help make informed trading/investing decisions.
Initial analysis will be on the 1 week timeframe.
First things first. The 2 Ascending triangle patterns found.
A blue one
A black one
Notice the Black triangle, this is a larger or more influential pattern developing since May 2022.
It holds more wait if signs show we a breaking out of this.
Targets would be $680-720 range.
Confirmation of a test of support Above the horizontal upper black trendline is needed.
This would indicate a continuation of COST previous uptrend, as Ascending triangles when confirmed are strong continuation patterns.
The smaller Blue Ascending triangle seems like a intermediate term consolidation area as well.
Notice how prices have consolidated Above the Black horizontal trendline of the bigger triangle, for weeks.
We have closed Last week ABOVE Blue triangle. We must await confirmation of this breakout.
This could mean we are breaking out of both Triangles.
Look also to the 21 EMA (Purple colored moving average).
We have recently bounced off of a support test. This is a great sign.
This can be a future support test area also. But i always look at it as a level of defence. It has moved up to the $550 level.
Overall, $550 level is critical support level now. Below it we go back into the larger ascending triangle, if we do go back below, this would indicate a fakeout.
An important thing to observe is VOLUME.
For this move to follow through, we must see an increase or spike in volume. Which currently doesn't seem like its there. Which could lead to a fakeout. So we must pay attention.
Remember Volume can really make or break a move especially a chart pattern.
Momentum indicators STOCH RSI and MACD are showing signs of bullishness
STOCH RSI has a BULLISH CROSS.
MACD is attempting to cross Bullish. If MACD crosses, this will give signs that uptrend is now more likely.
Taking positions must be done after COnfirmation or a decisive move Up.
Never take positions inside of a chart pattern, always consider entering after confirmation of breakout.
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Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on COST in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
Costco Wholesale Corporation ( NASDAQ: COST) Unravel The GemIn the last five years, shares of Costco Wholesale (COST -0.19%) have made for a wonderful investment, climbing 149%. This gain is much better than the broader market indices. But the stock is still 11% off its peak price (as of Oct. 27).
There is a lot to like about this company. Those looking to buy shares right now need to spend some time understanding more about Costco and the current situation.
With that being said, here are three facts the smartest investors know about this top retail business.
1. A membership-based business model
Anyone can go visit and shop at a Walmart, Target, or Home Depot location. This is typical in the retail industry.
However, Costco does things differently. Consumers must shell out $60 (for the basic plan) or $120 (for the Executive plan) a year to become Costco members, thus allowing them to shop at one of the company's 862 warehouses worldwide. This strategy has been successful, as there are currently 71 million member households, a figure that was up 7.9% year over year. Plus, these memberships registered a renewal rate of 92.7% in the U.S. and Canada in the most recent quarter.
From the company's perspective, this membership model is a financial boon. It drives customer stickiness, which can reduce marketing expenses and support strong revenue gains. It allows Costco to keep the pricing markups on its merchandise under control, as the business isn't trying to maximize product gross margin. And lastly, membership revenue provides a major boost to the bottom line.
Costco also has proven pricing power with its memberships. Costco is due to raise membership fees since it hasn't done so in over six years, but customers likely won't resist if history is any indication. The savings provided by being a Costco member far outweigh the annual fee.
2. An uncertain macro environment
Costco's revenue soared to double digits in both fiscal 2021 and fiscal 2022. The pandemic and its aftereffects spurred demand from consumers to shop at Costco. Perhaps elevated levels of inflation also drove people to these stores, as saving as much money as possible was the priority.
But like many businesses these days, the uncertain macro backdrop is providing a bit of a headwind. Net sales were only up 6.7% in fiscal 2023 (ended Sept. 3), with same-store sales rising 3%. And for fiscal 2024, Wall Street consensus analyst estimates call for revenue to increase 4.9%.
The company's management team points to weaker demand trends as they relate to big-ticket, discretionary items. These include things like electronics and jewelry, for example.
3. An expensive stock
Thanks to Costco's outperformance historically, the stock isn't cheap. It currently trades at a price-to-earnings (P/E) ratio of 38.4. Costco's shares are trading at a value that's more expensive than its past 10-year average of 33.1.
The valuation also represents a huge premium to rivals like Walmart (P/E of 31) and BJ's Wholesale Club (P/E of 18.6). This is likely warranted, as a valid argument can be made that Costco is a superior business to these two competitors.
$COST bearish divergence at resistanceStruggling to break above 2021 ATH. Bearish divergence on the oscillators on both the weekly and daily timeframe, below the trendline. Probably better shorts available in the market but if economic picture deteriorates could be a long way down.
Costco Wholsale next rally to $613.56Inverse Head and Shoulders formed on Costco Wholesale.
The price broke above and is now retracing to a conservative level. Once it tests, we then need a strong move up.
Now the reason I'd wait for the retest is because American indices are showing further downside to come and it might create this sideways consolidation range following the breakout.
7>21
RSI>50
Target 613.56
COSTCO: Watch this buy breakout level leading to All Time HighsCostco Wholesale Corporation is testing the R1 level (571.65) for the third day straight on a nicely balanced bullish 1D technical outlook (RSI = 60.287, MACD = 2.930, ADX = 22.559). Since the dominant pattern thus far is a Channel Up, if the 1D candle closes over the R1 level, traders should regard it as a bullish breakout opportunity, targeting the R2 level (TP = 612.00) which is the stocks ATH.
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ASCENDING TRIANGLETop line is flat and bottom line slopes up.
Neutral until broken.
Targets for Triangles can be estimated using the wide end of the triangle and projecting it for the point of the break be it up or down as the pattern is neutral until broken.
It is easier to estimate a break up as the top line of this triangle is flat.
It is a crap shoot to estimate the point of break on the bottom line as it slopes and there is no way to know where it will break. So I guesstimated. (o;
No recommendation.
COSTCO, at support, to trend down with sales reportCOSTCO has a history of trading against the market. Often when the market is down, COST is up, and vice-versa. Consider this a divergence making for a better entry.
COST is bumping up against well know support pre/post inflation at around $540.
May same store sales are due out tomorrow afternoon, 7/6/2023 at 1:15pm PDT.
Based on COSTCO's mid-month mark downs of products and increases in discounting from their flyers to the online purchases, they are working to keep revenue numbers up as well as total sales numbers.
COSTCO has recently been checking cards/IDs/applications to ensure the person paying is the cardholder/executive member. I have experienced this in San Antonio, Kyle, and Austin Metroplex.
Bearish and Bullish entries
Bearish, $540/545 CALL CREDIT SPREAD, expecting a trend down after same store sales disappoint beyond the core numbers.
Bullish, $510/515 PUT CREDIT SPREAD, when the trend down begins, expect COST to have support at the $520 range, but look for spread entries at $5 strike lower for added security against broader market moves.
An Iron Condor is possible, but we aren't at a FIB50 for COSTCO, so a put spread would likely lose money as the stock price goes down, so avoid an IC and take spreads OTM as the mark moves.
LEGEND:
Large red arrow points to the last same store sales impact on stock, as well as the trend recovery. COST is generally bullish vs. bearish at this time, and the daily MA cross confirms.
Drawn red box near arrow, is the day the last same store sales results were posted.
