Chart of the Day: Costco Bulls Not Showing Much Zest Ahead of Earnings

Cutting Through the Hype: Is Costco’s Earnings Day Worth Watching?

You might think this is new, but… the anticipation around big retail names like Costco (COST) always peaks just before earnings season. Yet, as we approach Thursday’s scheduled report, the market isn’t quite buzzing with excitement.

Is the Bullish Bubblin’?

The stock has seen a recent push higher, but that hasn’t translated into sustained enthusiasm. One could argue this is partly due to the fact that Costco is already at all-time highs, making it less attractive for new buyers. The bulls might be trapped there, hoping for positive news to justify holding onto their shares.

Yet, despite the lack of hype, we shouldn’t dismiss potential earnings strength.

At least, that’s the plan. But what if it’s an uphill battle? That’s where technical analysis comes in handy.

The Technicals Tell a Different Story

The MACD is currently on a sell signal—a clear indicator of bearish sentiment. While not alarming by itself, the recent surge up in price has been corrected. Money flow remains positive but bears are taking notice with the parabolic SAR turning bearish.

The candles themselves have taken on an amber hue, signaling neutrality but also caution.

These technicals suggest that while Costco may deliver strong results as expected, there’s a chance for a quick drop in its stock price post-earnings. This could present a good opportunity to add more shares if you’re a long-term investor looking for dips.

Cutting Through the Noise

As seasoned investors, we understand that Costco often sees significant movements after earnings reports. TheStreet Pro Portfolio rates it as a “buy” at anytime, but acknowledges the potential for volatility post-earnings. We believe this is not just about the numbers; it’s also about navigating the market’s reaction.

So, are you ready to buy low and hold tight? Or will you wait until the dust settles before making any moves?