Analysis: COST

With earnings due out tonight for Costco (COST)  , we notice the stock has come off recent highs quite a bit, making lower highs in the process but also higher lows in the weekly chart, below.

That means there is no formidable trend in place. That's okay to go sideways, but volatility from earnings may push this stock around quite a bit. The RSI is off the recent higher levels too, with the MACD as well on a sell signal. That does not mean sell though, it simply means sellers are still in the name. The SAR (dots, arrow) is still in bullish territory.

The daily chart (blue, Chaikin), above, shows a well-defined downtrend channel (purple) but countering with good relative strength amid weak volume in that downtrend. We look for the $460 level to hold firm, an eventual move back up through $500 and then beyond.