Discount Darlings:  

Some big headlines have been shaking up the discount plays in the consumer group. WMT jumped 7% on 5/16 after a well-received earnings reaction taking out a 61.54 cup base pivot in the process. Friday ended the week on a sour note with a bearish engulfing candle. COST has been a solid name and has acted well POST breakout from a cup base pivot of 785.92, but is a bit extended here, and Friday’s spinning top suggests tiring. The daily chart of rival BJ shows some very tight action and this could be headed to par which is the rough measured move if it can take out the bull flag pivot. The WEEKLY chart shows a 3-week tight pattern, with the last 3 weeks all CLOSING within just .37 of each other and we know explosive moves can come from that type of coiling action, especially when it happens at all-time highs like it has done here. Notice too on the WEEKLY chart that the break above the 80 area, which was a cup base 2 years in duration, also carries a measured move to 100 with the depth of the pattern at 60. Perserverence here as it took the stock 4 times to finally penetrate 80 to the upside.

This article requires a Chartsmarter membership. Please click here to join.