Stock of the day: Costco
01 June 2023
Towards the end of May, we witnessed a correction in the indices and stocks, signaling a more bearish sentiment in the mid-term. However, amidst this market environment, there are certain instruments that concluded the month either at or near their monthly highs. One such instrument that stands out is Costco, which currently exhibits a very promising setup on the chart.
Costco received a buy signal on Tuesday when the price broke out of a symmetric triangle pattern to the upside. On Thursday, the price further confirmed this breakout by utilizing the upper boundary of the triangle as a support and climbing higher. Symmetric triangles are considered robust and reliable patterns, indicating significant potential for further upward movement.
As long as the price remains outside of the triangle, the buy signal remains intact. However, if the price were to retreat back inside the triangle, the buy signal would be invalidated, and a false breakout pattern would emerge. Nevertheless, the likelihood of such a scenario currently appears limited.