Costco stock (Costco Wholesale Corp, Ticker: COST) delivered a powerful bullish signal on Friday, rebounding sharply from its intraday lows to finish the day with a solid gain. This impressive recovery has set a positive tone, leaving traders to question whether this upward momentum will continue into the new trading week.
This article provides a detailed breakdown of the recent price action and key levels to watch, offering a clear guide for traders on whether the market will go up or down on Monday.
Friday’s Market Recap: A Day of Bullish Conviction
A closer look at the data from the last trading session reveals a compelling story of buying strength:
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Closing Price: 989.94 USD
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Daily Change: +4.80 (0.49%)
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Pre-market (for Monday): 989.95 (+0.010 / 0.0010%)
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Day’s High: 991.74
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Day’s Low: 979.75
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Previous Close: 985.14
The trading day started with volatility. After opening near the previous close, Costco stock experienced selling pressure, driving the price down to a low of $979.75 around 2:00 pm. However, this dip proved to be a major buying opportunity. From that low point, the stock staged an aggressive rally throughout the afternoon, surging over $12 to reach its daily high of $991.74 just before the closing bell.
The Bullish Case: Why the Market is Likely to Go Up
Traders with a bullish outlook have strong evidence to support their position:
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The “V-Shaped” Recovery: The most significant indicator is the sharp, V-shaped recovery from the day’s low. This pattern shows that buyers aggressively stepped in to defend the ~$980 level, absorbing all selling pressure and reversing the trend with force. This level has now been established as a critical support zone.
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Strong Closing Momentum: Closing near the day’s high is a classic sign of strength. It indicates that buyers were in control as the session ended, and this positive sentiment often carries over into the next trading day’s open.
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Neutral Pre-Market: The flat pre-market data is also a positive sign. It shows a lack of overnight selling pressure, allowing Friday’s bullish momentum to remain the dominant factor heading into Monday’s open.
The Bearish Case: Potential Headwinds to Consider
While the outlook is positive, traders must also be aware of potential resistance:
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Resistance at the High: The day’s high of $991.74 now serves as the first major hurdle. If the stock struggles to break through this level on Monday, it could signal a pause in the rally and attract profit-takers.
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Morning Weakness: The initial sell-off on Friday cannot be completely ignored. If broader market sentiment turns negative, sellers could attempt to re-test the support level at $979.75.
Is It Right to Invest Today (on Monday)?
Based on the overwhelmingly strong finish on Friday, the bias for Monday is bullish.
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For the Trader: The strong reversal and closing momentum suggest that buying on dips could be a viable strategy.
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An aggressive approach would be to enter a position near the open, anticipating a continuation of Friday’s rally. The key is to watch if the stock can quickly take out the resistance at $991.74.
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A more conservative strategy would be to wait for a small pullback after the open to find a better entry point, or to wait for a confirmed breakout above
979.75 remains the critical line of defense.
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The technical signals for Costco stock are firmly bullish heading into Monday. The powerful rally in the final hours of trading on Friday demonstrates strong buying conviction. While traders should always be mindful of resistance at the recent high, the path of least resistance appears to be upward. Look for buyers to remain in control and potentially push the stock toward the psychological $1,000 level in the coming sessions.
Disclaimer: This article is for informational purposes only and is based on an analysis of the provided image. It should not be considered financial advice. All investment decisions should be made with the help of a qualified financial professional.
