Costco Wholesale Corporation operates membership warehouses in the US and internationally, offering a variety of branded and private-label products. The company is listed under the Consumer Defensive sector and trades on Nasdaq with the ticker “COST”. It also operates e-commerce websites in several countries, including the US, Canada, and the UK.
The stock is showing a bullish nested impulse Elliott Wave pattern since May 2022. It found support in December 2025, with projections for an upward trend in the first wave of a larger sequence possibly surpassing February 2025’s high. Wave movements include a high of $612.27 in April 2022 for the first wave ((I)) and $1078.23 in February 2025 for wave (I) of ((III)), with repetitions to $844.06 for wave (II).
In the wave sequence, the upward move is expected with the first wave of ((1)) of I of (III). A rally more than 50% of leg y suggests risk-free long positions for buyers. Future movements will confirm if the price exceeds the February 2025 high, targeting values above $1515. Conversely, a decline below the February 2025 peak might suggest a corrective phase, especially if the price drops below $844.06.
Based on the chart pattern, it appears Costco established a significant bottom around $844 back in December 2025, and we are now in the early stages of a new upward trend. This technical view is supported by strong fundamental performance, as the company’s recently reported holiday sales for that December period showed a 7.5% increase in same-store sales, beating expectations. This suggests consumer demand remains robust for Costco’s value-oriented model.
For derivative traders, this creates an opportunity to position for a rally by purchasing call options. With the stock holding firm above the December 2025 low, buying calls with expiration dates in April or May 2026 could capture the next expected move higher. This strategy allows for leveraged upside potential while clearly defining the maximum risk to the premium paid.
The critical price level to watch is the peak from February 2025, which stands at $1078.23. A sustained break above this former high would serve as strong confirmation that a larger, more powerful wave up has begun. The long-term price target in this bullish scenario is projected to be above $1515, representing a substantial potential gain.
However, we must remain aware of the risks, especially with the latest CPI report for December 2025 showing inflation ticking up to 3.8% and causing some broader market uncertainty. Our key support level is that December low of $844.06. A break below this price would negate the immediate bullish case and could be a trigger to use put options to hedge against a deeper correction.
We have seen this kind of price action before; after the major pullback in 2022, the stock gained over 150% into its 2025 high, showing its capacity for strong trend moves. Therefore, traders should watch the implied volatility of options. If it remains relatively low, it could signal a cost-effective moment to enter bullish positions before the next potential surge.
