By Jim Stanton, Editor, The 1-2-3 Trader
There are a number of stocks that are also tracing out bullish consolidation patterns - and we’re going to focus on Costco (NASDAQ: COST) this week.
The company released lower than expected earnings last week and the stock has lost some ground as a result. However, it hasn’t violated the consolidation pattern that’s it’s traded in since late March.
Subscribers to my 1-2-3 Trader service originally bought COST at $45 and some May calls on April 20. We took profits of 33% and 74% on the calls, but still own the stock.
As you can see, COST has solid support around the $45 area and if the stock tests that level again, it would represent another good buying opportunity for more calls.
If it doesn’t come back down to support, aggressive traders could buy the stock or some calls above the support level.
I expect the stock to reach at least the $50.50 area, possibly as high as $51.30, once it makes new highs.
Disclosure: No positions