Costco Broke Support; Macy's Close to Support

After stocks posted the first gain of the week, following much better than expected economic data, we identified the following trading ideas. Shares of Costco Wholesale Corporation COST closed the trading session at $82.57 below calculated support at $84.00 breaking current long setups, raising concerns, as this move might give the bears the upper hand. Costco Wholesale Corporation COST operates wholesale membership warehouses in multiple countries. The Washington State based company sells all kinds of food, automotive supplies, toys, hardware, sporting goods, jewelry, electronics, apparel, health and beauty aids, as well as other goods. Costco's stock was trading in a well-defined range with support at $84.00 and resistance at $88.68; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction. From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Costco's stock is still near the broken support, traders will be focusing on $84.00 to see if the stock can bounce back and return to its previous range. Traders wanting to establish a short position in Costco can do so if the stock breaks the intraday low, or if the stock bounces back and selling materialize again at previous support of $84.00. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position. Another idea is Macy's, Inc. M. The department store operator and owner of the iconic New York Store in 34th Street closed at $31.47 has left shares at a level that needs to be monitored closely by traders wanting to start or add into a position in the stock. Macy's, Inc. current stock range is defined by current calculated support defined at $30.49 and by the resistance level at $33.26. The area defined as calculated support, is where we expect for buyers to likely materialize, which could provide a lift to the shares. However, this area if breached will signal participants that the stock failed to entice buyers to step in and support the stock. Traders wanting to establish a position should pay close attention to Macy's, Inc. price action, and establish a position as close to support as possible, but only after buying materializes. Traders should understand that the resistance point at $33.26 might limit their upside, however if the stock breaks resistance, it could be a good point to add to the position.