Members-only bulk big box retailer Costco (COST) reported on Wednesday evening that their July net sales rose by 8.8% from the year-ago period. The stock is poised for a modest bounce at the open this morning on these strong same store sales numbers. Here's how to trade it based upon its weekly chart and key technical levels. There was a pre-market trade of $162.49.
Costco was riding high until June 16, when the stock was blind-sided by Amazon's (AMZN) deal to buy Whole Foods Market (WFM) . Particularly hurting was a downgrade to "neutral" from "buy" by Goldman Sachs (GS) . The stock plunged by 17% from its June 15 close of $181.33 on June 15 to as low as $150.00 on July 21.
Costco closed Wednesday at $161.28, which is 16.9% above its post-election low of $137.96 set on Nov. 9. The stock is also 11.7% below its post-election and all-time intraday high of $182.71 set on June 6. The final push to the high was fueled by a positive reaction to earnings released on May 25. Shares rose 0.4% to $161.91 on Thursday morning.
As August began, Guggenheim indicated that Costco would report strong July same-store sales. Strength in anticipation of this bullish research call upgraded the weekly chart profile to neutral from negative but oversold.
