COST closes below its opening price unable to hold early session gains
Costco Wholesale Corporation (COST) Technical Analysis Report for Sep 10, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, COST ended Tuesday at 297.00 losing $2.00 (-0.67%), slightly underperforming the Nasdaq 100 (-0.23%). Trading $0.87 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 5th, COST actually gained 2.29% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (COST as at Sep 10, 2019):
Tuesday's trading range has been $2.25 (0.76%), that's below the last trading month's daily average range of $5.14. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for COST.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical resistance level at 298.28 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Costco Wholesale. Out of 306 times, COST closed higher 53.92% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.80% with an average market move of 0.94%.