Disappointing Comparable Sales Weigh on Costco Stock

The security still sports a more than 17% year-to-date lead

Digital Content Manager
Jul 7, 2023 at 10:07 AM
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Costco Wholesale Corporation (NASDAQ:COST) is down 1.1% at $531.72 this morning, after the retailer reported a 2.5% year-over-year comparable sales drop in June, marking a second-straight monthly decline. Nevertheless, Telsey Advisory Group hiked its price target to $575 from $540.

The security just reached its highest level of the year, surging to $546.05 on July 5. Plus, the 20-day moving average has been acting as support since the security's late May bull gap. Year-to-date, COST is up 17.7%.

Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Costco Wholesale stock's 50-day call/put volume ratio of 1.66 ranks higher than all but 1% of annual readings. In other words, long calls have been getting picked up at a quicker-than-usual clip.

Now could be an ideal time to weigh in with options, too. This is per COST's Schaeffer's Volatility Index (SVI) reading of 15% that stands in the low 8th percentile of its 12-month range, suggesting these traders are pricing in lower-than-usual volatility expectations.

Overall options volume is already running at double the intraday average today, with 3,497 calls and 2,675 puts exchanged so far. Most popular is the weekly 7/7 530-strike put, which expires at the close.

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