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December 19 Chart of the Day - Costo

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Warehouse retailer Costco (COST) is making headlines this week for three significant reasons.

  1. The company posted better than expected earnings last week.
  2. The company's stock is trading at all time highs (ATH).
  3. The company announced a $15 per share dividend, its largest dividend ever.

What more could investors ask for?

Higher stock price of course... but how much higher could their stock price go?

In order to address this question we rely on our Trading All Time Highs strategy and tips where the only two price action technical analysis tools that we consider valid to use are Trend and Fibonacci.

So we applied both of those to a weekly chart and identified potential upside targets in the $735 area using Fib extension targets and much higher ($800+) using trend.

We also identified potential pull back targets should price decide to cycle back to the downside prior to arriving at those lofty targets.

Generally speaking though, trading ATHs can be a risky proposition because there is less historical data available at these levels.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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