Stock of the day: Costco

Dark clouds gathered above traders investing in the stock markets, the vast majority of instruments are dropping and it’s very hard to find an asset with a reliable bullish setup. Today, we couldn’t find any either, so we will stick to the short side of the market. Ladies and Gentleman, here’s the analysis of Costco!

Costco is currently in a very handsome bearish setup. The price created a head and shoulders formation (or double top if you will, blue). That was the end of an upswing and start of a down trend. Sellers managed to break the horizontal support around 570 USD (orange), which at the same time was a neckline of the Head and Shoulders pattern, which add additional confirmation.

Currently, the target is on the long-term uptrend line (green) and chances that we will get there are quite significant. In case of a breakout, the next aim is on the 470 USD (yellow) but let’s focus on the green line first, baby steps.

The sell signal will be cancelled when the price climbs back above the orange resistance but chances for that are now limited.