Plotting a Strategy in Costco

Costco (COST) has been a consistent and relentless performer since its 2009 low. The 50-day moving average has only dipped below the 200-day moving average twice since then, briefly in the summer of 2010 and in Wednesday's session.

COST-- Weekly Source: View Chart » View in New Window »

The weekly chart shows the long-term rally in the stock, but also reveals sideways price action over the last eight months, which could be constructing a head-and-shoulders topping pattern. In addition, the multiyear uptrend line was broken last month as the stock re-entered a trading range between $120 and $110, which has been a previous area of consolidation. The intermediate term looks tenuous but over the short term, the technical picture is more encouraging....243 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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