Costco Wholesale Corporation runs membership warehouses in the US and around the world, offering a wide range of both branded and private-label products. The company is part of the Consumer Defensive sector and trades on Nasdaq under the ticker “COST”. It also runs e-commerce sites in various countries, including the US, Canada, and the UK. Since May 2022, Costco’s stock has been following a bullish pattern, known as a nested impulse Elliott Wave. It found support in December 2025, with expectations of an upward trend in the first wave of a larger series, potentially exceeding the high from February 2025. The stock reached $612.27 in April 2022 in the first wave ((I)) and $1078.23 in February 2025 for wave (I) of ((III)), with a correction dropping to $844.06 for wave (II). We expect to see an upward movement in the first wave of ((1)) of I of (III). If the stock rallies more than 50% from its recent low, it suggests that buyers can enter risk-free long positions. Future price movements will indicate whether the stock exceeds February 2025’s high, with targets above $1515. If the price falls below the February 2025 peak, it may indicate a corrective phase, especially if it drops under $844.06. The chart shows that Costco likely hit a significant low of around $844 back in December 2025, and we may now be in the early part of a new upward trend. This view is backed by solid fundamentals, as recent holiday sales for that December demonstrated a 7.5% rise in same-store sales, surpassing expectations. This indicates that consumer demand for Costco’s value-oriented approach is strong. For derivative traders, there’s an opportunity to plan for a rally by buying call options. With the stock remaining above December 2025’s low, purchasing calls set to expire in April or May 2026 could allow traders to seize the expected higher movement. This strategy provides leveraged upside potential while clearly defining the maximum risk to the premium paid. A crucial level to monitor is the February 2025 peak of $1078.23. A sustained move above this level would strongly confirm the beginning of a larger upward wave. In a bullish scenario, the long-term price target is set above $1515, indicating substantial potential gains. However, it’s important to be aware of risks, especially since the latest CPI report for December 2025 showed inflation rising to 3.8%, which has brought some uncertainty to the broader market. The key support level remains the December low of $844.06. If the stock price falls below this mark, it could undermine the bullish outlook and may trigger the use of put options to hedge against a larger downturn. We’ve seen similar price movements before. After a major drop in 2022, the stock surged over 150% into its 2025 high, highlighting its ability for strong trend changes. Therefore, traders should keep an eye on the implied volatility of options. Low volatility could indicate a good time to enter bullish trades ahead of the next potential surge.

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