General Stock Ideas

[ITMS]

Costco Wholesale (COST) Stock Chart Is A Short

Shares of Costco Wholesale (COST) are signaling a sharp fall coming within the next few weeks. After being unable to take out the high pivot from September 2019 on multiple occasions, Costco has fallen below the daily 20 and 50 moving averages. To make the stock chart more bearish, it has been consolidating in a bear flag formation while the S&P is at all-time highs. This bearish price action screams institutional distribution. If you are a fundamental investor, the valuation on Costco Wholesale is insane at a 36/PE. While it may get a premium to Walmart (WMT), the level it is trading at it makes puts it in bubble territory.


The downside case for Costco Wholesale is clear. A drop from the current $296.33 level to $270 is coming in the next few weeks. I lose it on the short side or using puts with an expiration of March/April or June.


See the chart here: https://inthemoneystocks.com/costco-wholesale-cost-stock-chart-is-a-short/


Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com