COST Watch

Cosco Wholesale Corp. (COST) is declining for a fourth straight trading day and is in the second day of a parabolic sar bear signal.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
COST $59.41

The move has broken out of a sideways pattern that has held sway since Feb. 17. The average directional index is only 15, so this is not a stock on the move, at least recently.


The interesting thing about COST is that the only "news" to prompt the move is the fact that the price dropped below the 50-day moving average.

In other words, the stock is down because it's down, and with that, it has continued to go down. COST is an illustration of the mass psychology nature of the markets.

You are here:

• Reversal
• $62.12, +4.6%
• $61.96, +4.3%
• $61.50, +3.5%
• Now $59.41
• Reversal
• $58.13, -2.2%
• $56.75, -4.5%

I see some downside potential, but it's not spectacular. Earning are well ahead, on May 27, so that might bring some interesting volatility to the picture.

I'll add this to the Watchlist because I want to see how a pure technical dive plays.

This signal will be followed in the daily Watchlist, which is posted beginning around 2:45 p.m. Eastern. Look for it at www.timbovee.com.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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