2013 has been a pretty good year for Costco Wholesale ( COST); the king of the club stores has rallied more than 20% since the first trading day of the year. But that winning streak may not be over for shareholders who've kept holding on. Here's how to trade it.
Costco is currently forming a bullish price pattern called an ascending triangle. The pattern is formed by a horizontal resistance level above shares at $120 and uptrending support to the downside. Basically, as COST has bounced in between those two technical level since this past summer, all the while getting squeezed closer and closer to a breakout above that $120 resistance level. The breakout is the buy signal in this stock -- and we're getting a meaningful test of it this week.It's still a little early to call Costco's breakout confirmed. Shares closed above that $120 level in yesterday's session but only by a measly 37 cents. If shares can hold above $120 today, consider the breakout confirmed. If you decide to jump in here, I'd recommend keeping a protective stop at $112.
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