NEW YORK – Wall Street is on high alert for a potentially volatile opening on Monday after retail giant Costco Wholesale Corp (NASDAQ: COST) suffered a significant sell-off, breaking below the key psychological milestone of $1,000. The performance of this consumer bellwether is sending a cautionary signal about economic sentiment, though a flicker of late-day strength has given bulls a sliver of hope.
Costco closed Friday’s session down a sharp 1.25% at $990.21, a stark retreat from its previous close of $1,002.71. The intraday action was decidedly negative, with the stock opening below the $1,000 mark and failing to sustain an early, brief attempt to reclaim it. The stock then trended consistently lower for most of the day, hitting a low of $988.67.
However, the session did not end in a complete rout. In the final hours of trading, the stock stopped falling and began to stabilize. More importantly, in after-hours trading, Costco actually ticked up 0.11% to $991.31, suggesting that buyers were willing to step in once the regular session’s selling pressure had subsided.
This conflicting price action sets up a classic battle between bulls and bears for Monday morning.
The Bear Case for Monday: Key Support Has Broken
The argument for a lower market on Monday is clear and powerful. The breach of the $1,000 level in a high-profile stock like Costco is a significant bearish technical and psychological event. It suggests that conviction among sellers is high. The failure to mount any meaningful recovery during the main trading day indicates that dip-buyers were largely absent. Bears will argue that the path of least resistance is now lower and that Friday’s weakness is likely to attract further selling pressure at the start of the new week.
The Bull Case for Monday: Seller Exhaustion and a Nascent Reversal
Optimists will seize on the final act of Friday’s session. The fact that the stock did not close at its absolute low, but instead carved out a base around the $990 level, is a critical sign of stabilization. The subsequent pop in after-hours trading, however small, is the first piece of evidence that the selling may be exhausted. Bulls will contend that this late buying is the “smart money” stepping in after the panic, setting the stage for an “oversold bounce” or a relief rally to start the week.
The market is facing a crucial test on Monday morning. The dominant trend in Costco was undeniably bearish, pointing to a probable weak open for the broader market. The break below a major psychological level like $1,000 cannot be understated.
However, the late-day stabilization and after-hours strength are signals that should not be ignored. The initial direction on Monday will likely be determined by which of these forces prevails. If the after-hours buying carries over and Costco makes a decisive move back towards $1,000, it could spark a broad market rally. If, however, Friday’s downward momentum reasserts itself, it could confirm the bearish signal and lead to a challenging day for investors.
