Costco Stock Jumps 3% To Extend Rally As Technicals Signal Bullish Momentum

Costco Wholesale (COST) rose 3.07% in the most recent session to close at $942.89, extending its winning streak to three consecutive days and gaining 3.51% over that period. This bullish momentum warrants a multi-faceted technical assessment.
Candlestick Theory
Recent price action shows a recovery pattern forming near the $900-$910 support zone. The October 6th session printed a hammer candlestick near $904.25, signaling potential exhaustion of downward momentum. Subsequent bullish confirmation comes from three consecutive white candles culminating in a long-bodied green candle on October 9th, closing near the session high of $943.77. Immediate resistance is visible around the $950 psychological level, aligning with the September 25th swing high, while support solidifies near the $910-$915 consolidation zone from early October.
Moving Average Theory
The 50-day moving average (approximately $954) curving downward indicates persistent near-term pressure, while the price remains below the flattening 100-day MA (~$965). However, the sustained trading above the rising 200-day MA (~$925) underpins the longer-term uptrend. The current rebound off the 200-day MA reinforces its significance as dynamic support. A bullish MA crossover signal would require the 50-day to reclaim the 100-day, which hasn't yet materialized.
MACD & KDJ Indicators
The MACD histogram shows tentative signs of improvement, with bearish momentum easing as the signal line (-7.5) begins to converge toward the MACD line (-5.2). Simultaneously, the KDJ oscillator exits oversold territory (K: 35, D: 28, J: 49), crossing bullishly. While not yet overbought, this momentum shift supports near-term upside potential, though confirmation requires sustained improvement in the MACD crossover.
Bollinger Bands
Price has rebounded from the lower Bollinger Band (~$905) toward the middle band (20-day SMA, ~$930), signaling a recovery from oversold conditions within the band structure. The bands themselves have narrowed significantly compared to June's high volatility (width ~$100 vs. current ~$50), suggesting a potential expansion phase may develop if the breakout gains traction. A sustained move above the middle band would target the upper band near $960.
Volume-Price Relationship
The 3.07% gain on October 9th occurred on substantially elevated volume (3.74 million shares vs. 30-day avg ~2.4 million), providing strong validation for the breakout. Prior consolidation near support ($910-$915) saw declining volume, indicating limited selling pressure. This high-volume breakout increases the likelihood of further near-term gains, though continuous volume confirmation on follow-up days is needed to confirm trend strength.
Relative Strength Index (RSI)
The 14-day RSI currently reads 57, recovering sharply from oversold levels below 30 in late September and moving toward neutral territory. While not yet overbought (>70), the rapid ascent from oversold conditions may warrant caution against immediate exhaustion. However, the room for further upside (before the 70 threshold) suggests momentum may persist in the short term.
Fibonacci Retracement
Applying Fibonacci to the June 2025 high ($1,167.28) and the recent August 2025 low ($890.62):
- 23.6% retracement: $955.38 (key resistance near 50-day MA)
- 38.2% retracement: $1,000.89 (major swing point resistance)
The current price (~$943) is testing the immediate 23.6% Fib level. A decisive break above $955 would open the path toward $1,000, while failure here could see a retest of support near the $900-$910 confluence zone (prior lows + psychological support).
Confluence & Divergence Notes
Significant confluence exists at the $900-$915 zone, combining the 200-day MA, prior swing lows, and psychological support. This area attracted strong buying recently. A bullish confluence emerges if price sustains above $955, aligning the 23.6% Fib, declining 50-day MA, and the September resistance. No major bearish divergences are apparent, though the RSI’s rapid ascent warrants monitoring for potential negative divergence if price advances further without commensurate momentum increase.