Costco investors were trying to navigate a plethora of retail earnings.
Either in after-hours trading or in regular-hours trading, three of the four names hit new all-time highs within 24 hours of reporting the results. Target, which reported strong results Wednesday morning, is the only stock that hasn’t hit new highs. It came within 1.5% of doing so, though.
So what does this have to do with Costco? Like the names above, it’s considered a best-in-class retailer and one that’s doing well amid the coronavirus outbreak. Currently down more than $20 per share or 6.5% from its highs, Costco stock could have upside.
While shares are struggling for direction on Wednesday — which is admittedly a bit concerning with the broad-market strength — it’s still holding up well above its key moving average.
Costco stock is above the 20-day, 50-day and 200-day moving averages, as it continues to hold the 20-day as support.
Should shares lose the 20-day moving average as support, look for $300 to buoy Costco. There it will find a key support level throughout 2020, as well as the 50-day moving average.
Just below that is the 200-day moving average near $297 and uptrend support (blue line).
Should Costco do what the other four retailers above did — that is, trade within 1.5% of its all-time high within 24 hours of earnings — it will put shares at or above $320.40 by May 28th, the day it reports earnings.
To get there, shares will have to hurdle the $312.50 area, which has been a layer of resistance for Costco stock this year. It’s worth pointing out that the 78.6% retracement comes into play at $312.99.
Interestingly enough, shares have struggled with $320. So a move up to this level ahead of or after earnings would not be surprising.
Based on its peers, I like Costco stock for a pre-earnings play, as long as shares remain above $296.