Costco shares weekly forecast: Rebound chances capped by resistance at $899.08

Traders Union
All News
Stocks
Costco falls 0.70% this week

Highlights

Shares of Costco fell to $898.38 over the past week and remain below key moving averages.
Technical indicators show a bearish trend with negative momentum and oversold readings prevailing in recent sessions.
Expected five-day range is $881.7 to $908.62 with a high probability of consolidation or further decline unless $899.08 resistance is broken.

Dividend hike and margin pressures as Costco manages cost headwinds

Costco increased its quarterly dividend by 13%, with a new $1.47 per share payment scheduled for August 7, 2024, reflecting its ongoing commitment to shareholder returns through both regular and special dividends, according to Yahoo Finance and Ticker Report. In addition, Executive Vice President Pierre Riel received 4,552 performance-based restricted share units, as disclosed in recent SEC filings. Some pressure on fourth-quarter margins is anticipated from higher fuel and transportation costs, although tariff refunds could provide partial relief in the coming period.

Oversold signals deepen as negative momentum confirms downside bias

On the daily chart, momentum remains distinctly negative, with the MACD in sell territory and the CCI reading oversold at -102.91. Bull/Bear Power is also in the oversold zone, confirming seller dominance, as the stock hugs the bottom of its weekly range amidst 2.55% volatility and a contained move within a narrow range. Immediate resistance sits at $899.08, marked by the weekly low, while the Ichimoku Kijun at $938.61 acts as further resistance overhead. With low trend strength and oversold momentum readings, short-term action favors continued consolidation and downside pressure.

Downside risk dominates with consolidation likely below resistance next week

For the next five trading days, the expected range is $881.7 to $908.62, with a very low probability of an increase and a very high probability of a decrease. The base case sees the stock stuck beneath $899.08 and consolidating within the projected range. A bullish scenario would require a decisive move above the $899.08 resistance, while a bearish break below $881.7 would open the door to further downside.

Parshwa Turakhiya, analyst, sees sellers maintaining pressure on shares of Costco this week as the stock lingers in oversold territory near $898. He notes momentum remains negative on the daily chart, with MACD and CCI readings signaling more downside risk and resistance overhead at $899.08 and $938.61. Recent news of a 13% dividend increase and performance-based share unit awards reflect Costco's ongoing commitment to shareholder returns, but near-term sentiment is capped by concerns over higher fuel and transportation costs pressuring fourth-quarter margins. Turakhiya believes that unless shares break decisively above $899.08, expectations should remain for consolidation within the $881.7 to $908.62 range. "For now, I’m watching for further downside bias with low trend strength — only a clean break of resistance would change my view this week."

Earlier, analysts noted that Costco’s technical setup pointed to ongoing consolidation with a prevailing downside bias driven by oversold conditions. The current analysis builds on this view, highlighting fresh oversold signals and the importance of monitoring the $881.7 level for a potential further downside break in the week ahead.

Source of Data: COST Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.