COST the retailing warehouse chain LONGCOST had lackluster earnings two months ago and is due for another report in
late September, Despite the earnings miss, COST immediately uptrended as if
traders and investors were expecting far worse. Since June 1st, COST has been
in an ascending parallel channel bounded by the dynamic support and resistance
of the first and second VWAP standard deviation lines above the mean as anchored
to a date before the earnings. The MACD is currently showing bearish divergence
while COST is at the upper resistance in the channel. As a result I will place
a short trade on COST here with a stop loss above that red dynamic resistance
line. Upon managing the trade, I will close and reopen the trade long when price
meets the lower support blue VWAP line and is likely to reverse.
