Stock of the day: Costco

By Tomasz Wisniewski|

Published: March 06 2023, 19:12 GMT+0

Stock of the day: Costco


Friday’s reversal in the indices created many promising opportunities for stocks. In my opinion, one of the most interesting ones can be seen on the chart of Costco and this setup can potentially start a new bullish trend in the long term.

Throughout 2022, Costco was locked inside of the symmetric triangle pattern (blue). The price was moving sideways with lower volatility, testing the upper and lower line of the triangle. Friday brought a test of the lower boundary of this formation. The test was positive for the buyers as the price on the daily chart created a hammer candle (yellow). Hammers on supports like this, especially with a long tail like this one, usually have amazing buy signals.

The sentiment on Costco is positive and the buy signal is ON as long as the price stays above the lower line of the triangle. The price breaking this support would be a signal to sell but this option is currently slightly less probable.