Can Costco continue its quiet climb?

While Big Tech heavyweights like NVIDIA, Alphabet, and Microsoft receive the most praise for their material outperformances, Costco has quietly raced passed the S&P 500. The retail giant has rallied by more than 20% in 2024 and by more than 60% over the last 12 months. And over that span, the S&P 500 is up by more than 10% and 25%, respectively.
Though AI kings generate the most attention from investors, Costco shows there are still opportunities outside of the Big Tech basket. With the wholesale retailer reporting earnings on May 30, could it provide an opening to catch the next leg higher?
Historically, Costco has exhibited mixed performances after releasing its quarterly reports, as profit-taking often ensues. However, if the stock suffers in the days ahead, it could be a nice buying opportunity.

From a technical perspective, there are several red flags that could induce a pullback. To start, Costco confronts trendline resistance when connecting the previous highs, and the last two times the stock hit the trendline, corrections followed.
The current price action is similar to that of April 2022. Back then, the stock made a higher high, while its RSI made a lower high (RSI divergence). The bearish reading signalled weakening momentum, and combined with the trendline resistance, provided further fuel for a correction. Now, an identical setup is present. Trendline resistance has occurred alongside an RSI divergence, and both could set the stage for a pullback this week.
The key is to watch the 20-week moving average. Costco bounced off the level several times in April, and if it holds, the uptrend should eventually induce a breakout. If not, a repeat of the April 2022 breakdown could occur, which requires more patience.
So, should you pounce during the next Costco pullback, or will the bull run continue uninterrupted?