Costco’s Stock Soars Amid Market Turbulence


Last updated: November 19, 2023

In a sea of red, Costco (COST) emerged as a beacon of green on Wednesday. Despite the S&P 500 and Nasdaq 100 taking a hit, the wholesale retailer, part of the Action Alerts PLUS portfolio, hit a new 52-week high. It was one of the 31 stocks on the Nasdaq to do so, while 319 others plummeted to new lows.

Costco's Stock Soars Amid Market Turbulence
Courtesy of: www.carryfoodretail.com

Costco’s stock has been on a steady climb, gaining over 8%. This is particularly noteworthy considering the major indexes have been treading water. The Nasdaq 100 fund (QQQ) is down 1.8%, and the S&P 500 SPDR fund (SPY) has lost over 3%.

So, what’s next for Costco? The stock’s chart suggests it’s on an upward trajectory. It’s formed an ascending triangle pattern, indicating a potential rise to the $640 area. The current all-time closing high is $608.

While we’d love to see Costco break through the top line of the pattern on high volume, the real takeaway is its relative strength against the market.

The business stock’s steady rise in a shaky market suggests institutions are holding onto their shares.

Costco’s recent earnings report exceeded expectations for both earnings and revenue. As consumers look for ways to combat inflation, bulk buying at Costco, BJ’s Wholesale Club BJ, or Sam’s Club (WMT) offers a solution.

These members-only clubs also have lower theft rates. For instance, Target (TGT) expects to lose $1.2 billion to theft in 2023, a 140% increase from last year. In contrast, Costco CFO Richard Galanti stated that shrinkage is “…thankfully, not a big issue for us.”

In a nutshell, Costco’s stock is showing resilience in a volatile market, making it a standout in the current financial landscape.

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