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COST trade ideas

COST - Who doesn't love costco?Costco is probably one of my favorite places to shop and I think the stock price over the last 14 years has proven that to be the case for a lot of people. The main issue I have with buying this stock is valuation and growth of the company. I don't see how they will be able to grow fast enough to support a 35+ PE ratio. Taking the fib from the 08 lows to the 2022 highs, we get targets around 395, 327, and 258 for the 38.2, 50.0, and 61.8 retracement levels. If you think about it, 258 from a valuation perspective only starts to make the stock a reasonable price at about a PE of 20 assuming 13.23 EPS. It looks beautiful from a long term trend perspective and I think it has many more years to grow, but I wouldn't touch it unless it was 308 or less purely from a fundamental perspective. Might look to short this one this year. This is not financial advice. Good Luck!
NASDAQ:COSTShort
by ChrisPtaco_32
1
Costco’s shares have topped out Given historical data since 1987, Costco stock has performed quite well except during extreme events such as recessions and the market turmoil. Although stock kept its bullish momentum since 2009, it finally topped out at 612.27 in April 2022. The top pattern made during 2022 poses a threat to the long-term secular trend. The rising trend that stock has enjoyed over the past 12 years is clearly faded away after making a series of failed upward moves since Dec of 2021. The top formation suggests that price may slip to a supporting area between 377 and 394 followed by a rebound toward a range between 520 and 567. Base case scenario implies that Costco’s shares might be trading within a wide range between 377 and 567 (Average price of 472) throughout 2023. If price is unable to hold above 377, it is likely a worst-case scenario is in play. Worst case scenario points to a decline toward 290 level.
NASDAQ:COST
by Quantific-Solutions
Costco (COST)..Even a bear finds something to buy on a dipThis is a follow up to my recently written note on COST. The company reports earnings tonight after the close. The November same-store-sales data released on 12/1/22 rattled markets when it came in below expectations and reinforced those who feared that COST's strong sales throughout '22 were driven largely by the cheaper gasoline available at COST stores. They opined that cheaper gas attracted shoppers and now that gasoline prices have come off their highs, the reduction in traffic on the gas lines would result in fewer people buying at the stores. Reasonable concern. Add to that the product mix of consumers, stepping back from higher-margin technology and clothing items, and instead, spending money on lower-margin necessities such as food and other staples, a fate well known to other big-box retailers such as Target (TGT) and Walmart (WMT). Collectively, enough evidence of a change in fortunes to warrant, or at least put into question, the seemingly rich P/E it's maintained all year of close to 40 +/-, well above its five year average p/e of 36, and meaningfully above most of its competitors other than WMT who has hovered in the mid 40s! That rich valuation has been justified by lovers of the stock since COST has maintained an exalted status of being among the few seemingly 'recession proof' stocks out there. In hard times, people will continue to look for 'value' especially in non-discretionary purchases that must be made. The recent selloff ahead of tonight's earnings appears to be pricing in the nasty November sales miss plus anticipated more of the same. While my previous posts have highlighted my overall bearishness on the equity markets, COST is among the few names that I've been buying on dips, today's included. I think the value proposition is exactly that: value! Heading into what I believe will be increasingly difficult times for more and more Americans, all levels of income and wealth (well, almost all) are likely to step down a notch in terms of how much they spend, on what it is that they spend, and where they actually spend. COST ought to be a beneficiary of more shoppers as times get tougher. On their supply side too, there's reason to like COST. Being the behemoth that they are, their ability (and willingness) to pressure suppliers to keep prices down and to make them absorb more of the margin squeeze ignited by inflation is quite strong. Finally, on word on the chart. COST Is testing the lower bound of a flag pattern driven my momentum (MACD) that has rolled over hard, enough to put RSI close to oversold. The degree to which the lower bound holds as support...or not...will determine the pace of my interest in further accumulation. We'll know more tonight after the bell. But even on a disappointment and a subsequent fall in the stock price, unless there's some drastic change in the overall story, I believe COST is well positioned to withstand the upcoming likely economic rout better than most. Again, this is NOT advice!! It is merely food for thought and discussion. Comments welcome.
NASDAQ:COSTLong
by trader_investr
COSTCO - BEARISH SCENARIOCostco is set to report its fiscal first-quarter earnings Thursday after the market close. The company experienced cooling sales in November as shoppers spend more cautiously amid news of increasing layoffs and stubbornly high inflation. Also, In the near-term future, Costco may face margin pressure from elevated supply chain costs (retailers have been receiving inventory earlier than expected), greater promotional activity, and higher wages. The short-term expectations are for a breakout of the triangle and a target of $ 450. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
NASDAQ:COSTShort
by legacyFXofficial
Costco... Cleanup in Aisle #7 ? Here is a Costco trade (short or position flatten), I am looking at. We have an intersection of 2 harmonic sell patterns. (A Gartley and a Shark) (Note: I would feel more certain/comfortable of these patterns, if point X originated off the August 2022 high.) I have marked my most probable reversal area ($531-$534) and a stop above this level. As always I want some momentum behind my trades, so my entry is around the $522 area. Additionally I want my momentum indicator (bottom panel) to firmly roll over. So 2 conditions must be met. 2 Targets are marked. This is a 4 hour chart. So I am just watching now for an opportunity which Mr. Market may or may not give me. Not investment advice. Do Your own Due Diligence. I will update as needed. Earnings are early December. Good Luck S.
NASDAQ:COST
by Steve666
Costco (COST)...Not so teflon coated afterall...COST reported same-store-sales (sss) for Nov that fell short of expectations, largely on consumer spending shifts away from electronics (high margins) and more towards staples and necessities (food...relatively low margins). COST has been a 'recession proof' favorite of the market for some time which makes today's disappointment likely to meet with continued selling off the opening 6% drop. The 50dma is slightly below current levels and ought to be support, but many may recalibrate the 'recession-proofness' of COST and determine that more valuation extraction is needed. Before jumping to that conclusion, however, I'd urge a recall of the pricing power that COST has given its largesse, not just with the buying consumers, but more importantly, with its suppliers! The consumer spending pattern shift might dent margins some, but probably not as much as it might with a smaller retailer with less clout on forcing suppliers to cut costs. Further, COST's fee-based business, which hasn't been raised of late, could easily be ratcheted up a bit without losing too many (any?) customers, much like when AMZN raised its Prime membership fee. I see this as a 'buy on dip' opportunity (and I did). That's NOT advice in anyway, but simply food for thought and discussion. I'd also note that on the chart, COST was just breaking out to the upside of a flag formation and an historical 'swing zone' when these numbers hit. The 'swing zone' just below that is being tested now (roughly 500-505) along w/the 50dma below will be key to watch for a bounce...or not! Eager to hear other opinions!
NASDAQ:COSTLong
by trader_investr
2
ABC BullishEL is 467.50 Gap below price. Possible M pattern forming with peak 2 higher than peak 1 but too soon to know. If true the pattern could take this down a notch or 2. Folks get nervous closer to earnings and long entry level can be crucial. There is also in a Symmetrical triangle in this chart and the red resistance line will have to be broken to reach all targets. Prior Head and Shoulders but price is above the neckline of 469 so the neckline is support for now (targets to the left in orange type for this pattern) Possible stop under C. No recommendation. ABC and target is D. Earnings 12-8 AMC. Short interest is low at around 1%. Price opened (top of red candle) at close of yesterdays candle (top of green candle) but so far today the bulls have been unable to keep price at yesterday's close and at this moment, price is drifting downward.
NASDAQ:COST
by lauralea
2