COST rallies 1.7% on low volume
Costco Wholesale Corporation (COST) Technical Analysis Report for Jun 29, 2020 | by Techniquant Editorial Team
COST ended Monday at 301.59 surging $5.03 (1.7%) on low volume, outperforming the Nasdaq 100 (1.14%). This is the biggest single-day gain in over two months. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (COST as at Jun 29, 2020):
Monday's trading range has been $4.73 (1.59%), that's slightly above the last trading month's daily average range of $4.69. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for COST.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The market managed to close back above the 200-day moving average at 300.82 for the first time since June 23rd. Prices are trading close to the key technical resistance level at 301.90 (R1). After having been unable to move above 302.12 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 301.63. The last time this happened on June 25th, COST lost -1.32% on the following trading day.
Though the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 302.12 where further buy stops might get activated. As prices are trading close to June's low at 293.84, downside momentum could accelerate should Costco Wholesale mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Up Move" stand out. Its common bullish interpretation has been confirmed for Costco Wholesale. Out of 339 times, COST closed higher 52.80% 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 62.24% with an average market move of 0.77%.