Costco  (COST) - Get Costco Wholesale Corporation Report is breaking down today. The stock is off nearly 1.5% and is now trading well below last week's low. This very weak action has left behind a rather ominous looking top near the $170 area. A deep pullback may be about to take hold. 

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In early July Costco surged nearly 5% on extremely heavy trade. This June sales inspired breakout sparked a fresh rally leg that carried the stock up to its 2015 peak. Costco spent the remainder of the month treading water just below this area while the post-earnings uptrend weakened. This process continued into August despite the stock's putting in a higher monthly high. With shares now below last week's low a downside resolution to the last seven weeks of consolidation is playing out. For patient bulls, further downside will create a low risk entry opportunity.

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If today's weakness extends to new August lows, investors should expect more downside. Costco has a very solid support zone in place in the $161-to-$159 area. This zone includes the stock's January peak near the upper band and the June high near the lower. A drift down to this area, followed some basing action, would offer a very low-risk buying opportunity.

From a fundamental perspective, Costco is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. "We appreciate the company's operational efficiency, boasting ROIC of 15% (vs. 11% at Walmart, under 8% at both CVS and Walgreens, 11% at Whole Foods and 9% and Sysco), a rock-solid balance sheet (with $6 billion in cash), and operational efficiency (boasting best-in-class, accelerating inventory turnaround)," Cramer and Research Director Jack Mohr wrote on Friday. 

This article is commentary by an independent contributor. At the time of publication, the author was long COST.