Costco Wholesale Corporation (COST) has missed on the revenue when it reported results on 28 May. Today, the action is at the top of a cross of gold, but it has failed to hold its monthly pivot at $308.02 on 2 June. The big box bulk retailer operates as a members-only wholesale warehouse for the purchase of consumer goods, and gasoline. The costs associated with the COVID-19 have led to the loss of sales, the number of clients allowed in the shops has been reduced because of social distance.
The stock has had a poor track record of consumers when they are stuck. This was caused by the delay of membership fee. The stock is not cheap. Costco’s P/E multiple is 36.81 with a dividend yield of just 0.91%, according to the trends.
The stock closed on Monday, 1st June, at $308.29, an increase of 4.9% on the year, and it is 13.6% above its Feb. 26 low of $271.28. The stock is also 5.2% below its intraday high of $325.26 game Feb. 21.
The daily chart for Costco
The daily chart for Costco shows that the stock has started the last 52 weeks, above the golden cross. This was confirmed on April 3, 2019, when the 50-day simple moving average rose above the 200-day simple moving average to signal that higher prices will follow. This follow-up of the stock to its intraday high of $325.26 game Feb. 21.
The stock began to 2020, at the top of his semi-annual value level at $270.48, which was a positive point. After Costco shares topped out at $325.26 on Feb. 21, the stock quickly fell to $271.28 on Feb. 28. It is a trading range that I expect will continue to hold.
Note how rough the title has achieved since. The annual pivot at $287.88 has been a magnet between 12 March and 3 April. The low was just above his semi-annual value level at $270.48. The monthly pivot for the month of June to $308.02 not on 2 June.
The trading range is between its semiannual value level at $270.48 and its quarterly risky level at $324.07. In between are the annual pivot at $287.88 and its monthly pivot at $308.02.
The weekly chart for Costco
The weekly chart for Costco will be downgraded to negative given a close on Friday below its five-week modified moving average at $304.27. The stock is well above its 200-week simple moving average, or the return to the average, of $215.91.
The 12 x 3 x 3 weekly slow stochastic reading is scheduled for the end of this week at 60.17 against 59.20, on the 29th of May. Another weak point in the course of the next few days would be at the origin of the week of the reading in the slide below 59.20.
Trading strategy: Buy Costco stock on the weakness of its annual and semiannual value levels at $287.88 and $270.48, respectively, and reduce the holdings on the strength of its quarterly risky level at $324.07. The monthly pivot at $308.02 must remain a magnet.
How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of June has been established on the basis of the May 29 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.