By Doug Busch
For much of the past year, Costco Wholesale has done little to excite investors. After a powerful multiyear run, the stock spent 2025 receding as momentum cooled and leadership rotated elsewhere.
But charts rarely stay quiet forever. Recent price action suggests Costco may be transitioning back to accumulation, helped in part by strong December sales data. The stock is beginning to reclaim key technical levels and showing signs of renewed buying pressure.
This article is part of a weekly series. Read last week's edition here .
Costco remains a force in consumer staples, representing nearly 10% of the State Street Consumer Staples Select Sector ETF as its second-largest holding. More importantly, it has started to show relative strength versus peers. While the sample size is small, Costco is already up 10% in 2026, compared with a 6% gain for rival BJ's Wholesale Club and 8% advance for Walmart. This can be seen as early indication that leadership in the group is shifting.
I wrote earlier this week about consumer staples stocks more generally and why the group could see a strong lift in 2026. That theme becomes even more compelling in the context of underlying market conditions. The Nasdaq Composite Index closed 2025 with its third straight year of gains exceeding 20%. In that environment, consumer staples may offer a logical destination for capital as investors look for a prudent pause in the growth rally.
Let's take a look at the bullish technical case for Costco.
The stock has posted a modest one-year return, up 4% to lag the State Street Consumer Staples Select Sector ETF's 7%. Last week, Costco reclaimed its 21-day exponential moving average and 50-day simple moving average, both of which are now sloping higher. Its 200-day simple moving average is beginning to flatten, another indication the longer term downtrend may be losing steam. This setup suggests an entry at current levels, with the opportunity to add above the 200-day simple moving average at $955. From here, the stock appears positioned for a quick move toward the round $1000 number, which would set up a double bottom pattern, last touched on Aug. 20.
Costco was trading around $953 Thursday.
On the weekly chart, the stock most recently surged more than 8%, its best return since May 2022. Costco is up another 3% through the first three days of this week, a good follow-through. The stock has struggled to stay above the very round $1000 level, with brief excursions above it in February, March, May, and June before pulling back. Last week's move above the round $900 mark is notable, as this area has acted as both support and resistance since July 2024, reflecting significant price memory. This action sets the stage for a potential double bottom add on pivot at $1067.18, with a projected move toward $1300 by year end 2026, representing roughly 36% upside from current levels. An entry here makes sense, with a bullish stance maintained as long as the stock holds above $910.
From a technical standpoint, the path of least resistance for Costco now appears higher.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 16, 2026 00:04 ET (05:04 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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