Checking In with Costco Stock Before Earnings

Costco will report fiscal first-quarter results after the close tomorrow, Dec. 8

Costco Wholesale Corp (NASDAQ:COST) is gearing up for its fiscal first-quarter earnings report, due out after the close Thursday, Dec. 8, for which Wall Street anticipates profits of $3.11 per share.

Costco stock has been sliding on the charts ahead of the event, after surging to its highest level since September. However, the security could snap its four-day losing streak if today’s small gains hold. At last glance, COST was up 0.6% at $484.09.

Costco stock has a split post-earnings history over the last two years, with four of the last eight next-day sessions finishing positive, and four negative. The options pits are pricing in a post-earnings swing of 6%, regardless of direction, which is higher than the 2.5% move the stock has averaged over the aforementioned reports. 

It’s worth noting that COST’s 14-day relative strength index (RSI) of 23.5 sits in “oversold” territory, suggesting a short-term bounce could be in the cards. Year-to-date, the equity is still down 14.6%. 

Now looks like a good time to weigh in with options, as COST’s Schaeffer’s Volatility Scorecard (SVS) of 90 out of 100 indicates the security has exceeded option traders’ volatility expectations during the past year.

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