In today’s stock of the day, let’s focus on Costco, which is currently flashing a proper sell signal. This bearish setup was triggered at the very end of September, and the technical picture looks increasingly negative.
On the chart, we can spot two symmetric triangles marked with red lines – a smaller one nested within a bigger formation. The lower red lines not only outline these triangles but also acted as uptrend supports for months. However, both of these uptrend lines have now been broken to the downside, and that break marked the start of a sharp decline. The price dropped significantly, sliding to levels that were last seen back in April.
This clean technical breakdown provides us with a strong bearish signal on Costco. The sentiment will remain negative as long as the price stays below those broken red lines. The only scenario that could cancel this sell signal would be a comeback above all three resistance lines – but with current momentum, the chances of that are slim. For now, the path of least resistance remains to the downside.