Costco Wholesale Corporation (COST) is testing its 200-day moving average, an area that historically acts as key support. While this is not yet an official swing trade, the technical setup is worth watching. The stock has been in a strong uptrend for months, but recent weakness has brought it back to a crucial level where buyers may step in.
Technical Analysis: Is COST Setting Up for a Reversal?
200-Day Moving Average Support – COST is currently testing its 200-day MA, a critical level where institutional buyers often step in. A successful hold here could trigger a bounce back toward previous highs.
Oversold RSI – The Relative Strength Index (RSI) has dropped into oversold territory, a rare occurrence for Costco, signalling a potential rebound.
PPO Divergence – The Percentage Price Oscillator (PPO) is showing early signs of a potential bullish reversal. If momentum picks up, we could see a rally in the short term.
Key Resistance Levels – If COST bounces, initial targets would be $930-$950 (100-day MA backtest), with a full recovery aiming toward $1,000+ if market conditions allow.
While COST is technically positioned for a bounce, broader market conditions and sentiment will play a role. Given Costco’s strong fundamentals, a confirmed reversal could present a solid swing trade opportunity.
Costco’s Strong Financial Performance in Q2 2025
Costco recently released its Q2 2025 earnings report, highlighting continued growth across all segments.
📈 Key Financial Metrics:
Revenue: $63.7B (+9% YoY)
Net Income: $1.78B
EPS: $4.02
Gross Margin: Improved to 10.85%
🚀 Growth & Expansion:
Membership Growth: Paid members surged to 78.4M
New Warehouse Openings: 23 net new locations added
E-Commerce Sales: Up 21% YoY
Costco’s expansion efforts remain strong, with international growth in Canada, Mexico, the UK, and China. Despite economic uncertainties, Costco continues to thrive, reinforcing its reputation as a defensive retail giant.
Conclusion: Is This a Buy-the-Dip Moment?
With COST testing key technical support and a strong earnings backdrop, traders should watch for confirmation of a bounce before entering a long trade. If buyers defend the 200-day MA, it could offer a solid swing trade opportunity with a clear risk-to-reward setup.
However, if weakness persists and the market continues to sell off, Costco could break below support, opening the door for further downside. For now, patience is key—waiting for a strong bounce before entering.
🚨 Final Thought: If the market stabilizes, Costco’s long-term strength makes it a strong candidate for accumulation—but timing is everything.
Technical Analysis: Is COST Setting Up for a Reversal?
200-Day Moving Average Support – COST is currently testing its 200-day MA, a critical level where institutional buyers often step in. A successful hold here could trigger a bounce back toward previous highs.
Oversold RSI – The Relative Strength Index (RSI) has dropped into oversold territory, a rare occurrence for Costco, signalling a potential rebound.
PPO Divergence – The Percentage Price Oscillator (PPO) is showing early signs of a potential bullish reversal. If momentum picks up, we could see a rally in the short term.
Key Resistance Levels – If COST bounces, initial targets would be $930-$950 (100-day MA backtest), with a full recovery aiming toward $1,000+ if market conditions allow.
While COST is technically positioned for a bounce, broader market conditions and sentiment will play a role. Given Costco’s strong fundamentals, a confirmed reversal could present a solid swing trade opportunity.
Costco’s Strong Financial Performance in Q2 2025
Costco recently released its Q2 2025 earnings report, highlighting continued growth across all segments.
📈 Key Financial Metrics:
Revenue: $63.7B (+9% YoY)
Net Income: $1.78B
EPS: $4.02
Gross Margin: Improved to 10.85%
🚀 Growth & Expansion:
Membership Growth: Paid members surged to 78.4M
New Warehouse Openings: 23 net new locations added
E-Commerce Sales: Up 21% YoY
Costco’s expansion efforts remain strong, with international growth in Canada, Mexico, the UK, and China. Despite economic uncertainties, Costco continues to thrive, reinforcing its reputation as a defensive retail giant.
Conclusion: Is This a Buy-the-Dip Moment?
With COST testing key technical support and a strong earnings backdrop, traders should watch for confirmation of a bounce before entering a long trade. If buyers defend the 200-day MA, it could offer a solid swing trade opportunity with a clear risk-to-reward setup.
However, if weakness persists and the market continues to sell off, Costco could break below support, opening the door for further downside. For now, patience is key—waiting for a strong bounce before entering.
🚨 Final Thought: If the market stabilizes, Costco’s long-term strength makes it a strong candidate for accumulation—but timing is everything.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.