Costco Wholesale Corp. (COST) stock is under the microscope of U.S. investors after it closed the week with a notable drop, breaking below the key psychological milestone of $1,000 per share. As traders prepare for the week ahead, the crucial question is whether this downward move signals further weakness or presents a rare discount on a market-leading stock. This detailed analysis breaks down Friday’s trading session to forecast what the market might do on Monday.
A Recap of Friday’s Bearish Session
To predict Monday’s outcome, we must first understand the selling pressure that dominated Friday’s trading. The data reveals a clear bearish trend:
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Key Price Level Breached: The stock closed at
12.50 (1.25%). More importantly, it closed below the $1,000 mark.
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Negative Opening: The session began on a weak note, opening at $999.08, well below the previous day’s close of $1,002.71. This “gap down” immediately put buyers on the defensive.
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Consistent Selling Pressure: Throughout the day, the stock trended downwards, hitting a low of $988.67. An attempt to rally back above $1,000 early in the session stalled at a high of $1,003.59 before sellers took control again.
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Weak Close: The stock finished the day near its lowest point, indicating that there was little buying interest to absorb the selling pressure before the closing bell.
Forecast for Monday: Key Battlegrounds for Costco Stock
Unlike some sessions, Friday’s close did not provide any late-day pre-market data, meaning our forecast for Monday must be based on the strong downward momentum from the regular trading hours. The opening on Monday will be a tug-of-war between sellers continuing this trend and buyers seeing value at these new, lower prices.
The battle on Monday will be defined by these critical price points:
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Crucial Support Level: $988.67. This was Friday’s low. It is the most important level to watch at the market open. If the stock breaks below this point, it could trigger a fresh wave of selling.
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The Psychological Hurdle: $1,000. For bulls, the first mission is to reclaim this level. A sustained move and close back above $1,000 would be a strong sign that the dip was temporary.
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Initial Resistance Zone: $1,002.71 – $1,003.59. This area represents the gap from Friday’s open and the daily high. Overcoming this resistance would show that buyers have decisively taken back control from sellers.
Will the Market Go Up or Down on Monday?
Given the weak close and the consistent selling pressure on Friday, the immediate momentum for Costco stock is tilted to the downside.
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Bearish Scenario (Most Likely at the Open): The market is likely to open flat or slightly lower on Monday, immediately testing the $988.67 support level. A failure to hold this support would suggest the market is headed lower.
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Bullish Scenario: Buyers could interpret the drop below $1,000 as an overreaction and step in aggressively at the open. If they successfully defend the
1,000**, it could reverse the negative sentiment.
The first hour of trading on Monday will be critical in determining whether the selling pressure from Friday continues or if buyers can establish a new floor.
Is It the Right Time to Invest in Costco Stock?
Answering this question depends entirely on your investment strategy.
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The Case for Buying: Costco is a premier retail company with a loyal customer base. For long-term investors, a dip like this can be an opportunity to acquire a high-quality stock at a better price. The stock is now further off its 52-week high of $1,078.24. However, with a high P/E ratio of 56.17, it is still priced for strong growth, not as a value stock.
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The Case for Waiting: For short-term traders, buying into a stock with strong downward momentum is risky. The phrase “don’t catch a falling knife” applies here. The prudent approach would be to wait for a sign of stabilization. This could be the stock holding its support level for a few hours or, even better, a decisive close back above the $1,000 mark. With a low dividend yield of 0.53%, there is little reward for waiting through further price declines.
In summary, Costco stock enters the new week in a precarious position. The negative momentum from Friday suggests the potential for further downside on Monday. Cautious traders should wait for signs of a confirmed reversal before committing capital, while long-term investors may see this as a chance to begin accumulating shares of a market leader.
Disclaimer: This analysis is based on the data provided in the image and is for informational purposes only. It does not constitute financial advice. Please perform your own due diligence and consult a certified financial advisor before making any investment decisions.
