I like Costco (NASDAQ:COST). Who doesn't? You go shopping there, get a complete basement full of stuff you want, packaged neatly for a family of 12. It is our primary grocery store.
And as if that was not enough, they have people around every corner serving you hors d’oeuvres to enhance the shopping experience. When you go to check you don't find 15 open lanes with no cashier. Rather, every register is manned and they ring you up in about 30 seconds.
Even with such a good shopping experience you still think there must be a catch and finally you see it as you're about to leave. Someone wants to count everything in your cart to see what you have stolen. This could take forever. But it would seem that laid off NASA engineers are performing this job because this too only takes 5 seconds.
I guess the one downside is that I never get out of the store without spending at least $300. But that is the good side too. You see Costco’s stock price has been a tell for the strength of the market. The chart above shows that the stock moved sideways from early December until breaking higher to start February. But since then it has pulled back into a consolidation channel, over the prior consolidation.
Sound familiar? I have had a position in this stock since it started moving higher, below 120. But the current price action suggests it may be time to add to that position, or if you missed the chance in the past to start a position.
Since the beginning of March the Bollinger Bands® have been squeezing. That started to change earlier this week as they are slowly opening to allow a move. This as the price is pushing the top band higher and testing resistance at 151.50. As it holds over the 20 day SMA, the momentum indicators are turning more bullish.
The MACD has crossed up and is rising. The RSI has maintained the bullish range but is moving higher again as well. I am looking for a solid break above 151.50, as I stroll around the store eating bites of pizza and small yogurt cups, to add to positions.
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