Costco’s shares have topped out Given historical data since 1987, Costco stock has performed quite well except during extreme events such as recessions and the market turmoil. Although stock kept its bullish momentum since 2009, it finally topped out at 612.27 in April 2022.
The top pattern made during 2022 poses a threat to the long-term secular trend. The rising trend that stock has enjoyed over the past 12 years is clearly faded away after making a series of failed upward moves since Dec of 2021. The top formation suggests that price may slip to a supporting area between 377 and 394 followed by a rebound toward a range between 520 and 567.
Base case scenario implies that Costco’s shares might be trading within a wide range between 377 and 567 (Average price of 472) throughout 2023. If price is unable to hold above 377, it is likely a worst-case scenario is in play. Worst case scenario points to a decline toward 290 level.
