Costco's Intraday Surge: What's Fueling the 3.9% Rally?

Summary
• Costco (COST) surges 3.91% to $917.115, hitting an intraday high of $917.88
• Turnover spikes to 1.06M shares, with 239.6% of average daily volume
• Executive membership strategy and traffic optimization drive investor optimism
• Options frenzy: 2026-01-16 chain sees 246–528 contracts traded for $910–$920 calls
Costco’s intraday rally defies a weak retail sector as membership-driven growth and operational efficiency gains spark a buying frenzy. With the stock trading 3.9% above its open and 5.9% above its 200-day average, the market is betting on a structural shift in customer behavior and membership economics.

Executive Membership Strategy Drives Costco's Intraday Rally
Costco’s 3.9% intraday surge is directly tied to its aggressive push for Executive memberships, which now account for 49% of its 81.4 million total members. The company’s early-morning access perk for Executive members has reduced peak-hour congestion, boosting customer satisfaction and encouraging upgrades. CFO Gary Millerchip highlighted a 9.1% year-over-year growth in Executive memberships, with 39.7 million paid accounts. This shift not only increases membership revenue (up 7.3% YoY) but also enhances gross margin efficiency, as Executive members spend 20–30% more per trip. Analysts at Placer.ai note that the strategy has smoothed traffic flow, with 30–45 minute visits rising post-implementation, signaling stronger customer retention.

Leverage the Rally: COTG ETF and High-Gamma Calls in Focus
• 200-day average: $950.34 (below current price) • RSI: 61.29 (neutral) • MACD: -5.67 (bullish divergence) • Bollinger Bands: Price at 893.40 (upper) • Support/Resistance: 854.34–941.01

Costco’s technicals suggest a short-term bullish trend amid long-term bearish pressure. The stock is trading above its 30D MA ($880.43) but below its 200D MA ($950.34), indicating a potential consolidation phase. The Leverage Shares 2X Long COST Daily ETF (COTG) is up 7.93%, amplifying the rally’s momentum. For options, two contracts stand out:

• COST20260116C920: Call, $920 strike, expiring 1/16/2026
- IV: 23.15% (moderate) • Leverage: 58.65% • Delta: 0.56 • Theta: -2.72 • Gamma: 0.0117 • Turnover: 589,352
- Payoff: At 5% upside ($962.97), intrinsic value = $42.97. High gamma ensures sensitivity to price moves, while moderate IV supports durability.

• COST20260116C925: Call, $925 strike, expiring 1/16/2026
- IV: 23.73% (moderate) • Leverage: 68.42% • Delta: 0.50 • Theta: -2.54 • Gamma: 0.0116 • Turnover: 509,240
- Payoff: At 5% upside, intrinsic value = $37.97. Strong liquidity and high leverage make this ideal for aggressive bulls.

Action: Buy COTG for leveraged exposure or the 920/925 calls for high-gamma plays. Target $930–$940 as key resistance levels.

Backtest Costco Wholesale Stock Performance
The performance of Costco (COST) after a 4% intraday surge from 2022 to now can be summarized as follows:1. Earnings Performance: Costco's net sales for the fourth quarter of 2022 increased by 15.2% to $70.76 billion compared to $61.44 billion in the same period the previous year. Excluding the impact of foreign exchange, the increase would have been even more significant, with an additional $29.8 million. The reported 7.5% increase in net sales would have been a 10% increase if not for the foreign exchange impact.2. Stock Price Movement: Following the 4% intraday surge in 2022, the stock's performance can be described as stable. The 10% decline in 2022 is relatively modest compared to broader market indices, indicating resilience in the face of market volatility.3. Market Sentiment: Despite missing some estimates, such as EPS in the fourth quarter, Costco's consistent performance and high renewal rates reflect strong underlying business fundamentals. The company's e-commerce sales also showed a robust 8.4% increase, with significant growth in various product categories.In conclusion, Costco's performance after the 4% intraday surge in 2022 has been positive, with strong earnings growth and a stable stock price. The company's strategic focus on e-commerce and its ability to navigate foreign exchange impacts position it well for continued growth.

Bullish Momentum Unlikely to Subside—Act Now on Costco's Breakout
Costco’s 3.9% rally is underpinned by structural membership growth and operational efficiency gains, with technicals and options data confirming strong short-term momentum. The RSI at 61.3 and MACD divergence suggest further upside potential, while the 2X leveraged COTG ETF offers amplified exposure. Watch for a break above $930 to validate the bullish case. Meanwhile, the retail sector’s weakness (WMT down 0.825%) highlights Costco’s outperformance. Act now: Position in COTG or the 920/925 calls before the 1/16 expiration, and monitor the 941.01 200D MA as a critical support level.