How $Costco(COST)$ performed after reporting its latest earnings (2 Mar 2023 after market)?
Although the stock dropped by as much as 4.18% after the earnings report was released, it only closed down 2.15%, likely due to the strength of the broader market.
SPX rally after TD9 perfect buy
DJI rally after TD9 perfect buy
In fact, last Friday, all three major indices rose substantially, confirming the perfect buy indicator (green arrow pointing upwards in the chart above for $DJIA(.DJI)$ and $S&P 500(.SPX)$) with Tom Demark 9 sequence. You can read the details from my post last Friday 3 Mar 2023, titled: Perfect Buy formed for SPX and DJI, is a reversal really in play?.
COST forming TD9 last friday
And $Costco(COST)$ also formed the perfect with TD9 sequence on Friday 3 Mar 2023 (see chart above), which could mean that if the broader market continues to rise, Costco is likely to rise as well.
Feasible trade with Call Option
Moreover, the RSI14 of Costco is quite low at 37, which suggests that there's room for the stock to run. And with the call/put ratio above 1 and increasing options volume, there seems to be a bullish sentiment toward the stock. One of the possible trades would be call option around 460, near to the intermediate support level (See chart above).
COST support levels
So, what about Costco's latest earnings report?
Well, the numbers speak for themselves. Net sales for Q2 FY2023 increased by 14.7% to $48.9 billion, while net income for the same period was $1.6 billion, or $3.79 per diluted share. And Costco's comparable sales for Q2 FY2023 increased by 12.3%, with e-commerce sales growing by 16.5%.
In addition, the company's operating income for Q2 FY2023 increased by 14.6% to $2.5 billion. And as of February 26, 2023, Costco operated 858 warehouses worldwide.
Overall, Costco's earnings report shows continued strong performance, with significant growth in net sales and net income compared to the same period last year. The company's comparable sales figures also indicate healthy demand for its products, both in-store and online.
Of course, it's worth noting that while the COVID-19 pandemic has likely played a role in Costco's success earlier, the company's focus on providing value to customers and its membership-based business model have also contributed to its continued growth.
In summary buying Costco stock could be a good choice. I just need to make sure I take profits quickly over the next few days when available, and don't overstay my welcome, as we don't know how long the market rally will last.
Recap on The Tom Demark TD9 Perfect Buy
The Tom Demark TD9 Perfect Buy is a technical analysis indicator that helps traders and investors identify potential buying opportunities in the financial markets. Developed by Tom Demark, a renowned technical analyst and founder of Market Studies, LLC, the TD9 Perfect Buy is a trend reversal indicator that is designed to identify when a security is oversold and due for a bounce.
The indicator is based on a series of nine consecutive bars on a candlestick chart. When the ninth bar is completed, it signals a potential buying opportunity, as the pattern suggests that a trend reversal may be imminent. However, it is important to note that the TD9 Perfect Buy should not be used in isolation, and traders may want to use other technical or fundamental analysis tools to confirm the signal before making a trading decision.
Overall, the Tom Demark TD9 Perfect Buy is a powerful technical indicator that can help traders and investors make more informed trading decisions and potentially improve their performance in the markets. By combining the TD9 Perfect Buy with other analysis tools, traders can potentially identify buying opportunities with greater accuracy and confidence.
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