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Swing Trade Idea (COST) – June 29, 2022

Our bearish trade for Wednesday, June 29th is Costco Wholesale Corporation (COST). COST is part of the Consumer Staples sector, which has performed at -3.32% over the last month, with COST’s performance over the same period at 0.78%.

COST recently formed a double-top at $487, as strength is declining. As both COST, as well as its sector, has formed lower highs, we expect this level to hold as resistance. This provides a good risk/reward bearish entry. 

As a close, if COST were to trade above $489 for multiple days, this would invalidate our analysis and consider cutting losses on the trade. We also want to consider cutting losses on this options trade if the value of the vertical spread moves below $5.88.