Costco (COST) Stock Hits A Death Cross But Don’t Hit Sell Just Yet - Costco Wholesale (NASDAQ:COST)

Costco Wholesale Corp COST is about to experience its first Death Cross since October 2022, sending technical analysts into a frenzy. For the uninitiated, a Death Cross occurs when the 50-day moving average crosses below the 200-day moving average—a pattern often linked with bearish signals. Naturally, Wall Street chatter starts with "Sell!"

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History Suggests Caution

The last Costco Death Cross in October 2022 marked the market bottom, triggering an almost immediate 10% rally. Could this be another contrarian opportunity?

Price action tells an interesting story. COST has been in a technical correction, largely range-bound since November 2024, forming a pattern of higher lows and lower highs, also known as price compression. This often signals a buildup before a decisive move, not necessarily a freefall.

COST Technical Picture Mostly Bullish

Costco is trading around $979.35, above its 20-day SMA (simple moving average) at $957.60, its 50-day SMA at $972.93 as well as its 200-day SMA at $972.48—all bullish signals.

Meanwhile, the eight-day SMA suggests caution at $980.51, adding another layer of resistance to the mix. Add in a positive (bullish) MACD (moving average convergence/divergence) indicator of 3.60 and an RSI (relative strength index) of 56.01, and the stock looks poised for potential upside rather than a crash. COST's price compression suggests investors could see a bounce off these key moving averages, potentially pushing the stock back toward $1,000 and maybe even toward all-time highs.

For U.S. investors, the Death Cross shouldn't automatically trigger panic. Costco's combination of historical resilience, bullish moving averages, and solid technical indicators suggests this could be a buy-the-dip scenario rather than a sell-off.

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