I am a firm believer that ultimately, the underlying fundamentals (as well as the technicals) will ultimately determine where a stock or the market is headed. However, the variability of when a change in fundamentals actually manifests in the form of correction/bear market or rally/bull market on a stock can be very large as there are numerous factors involved.
My quick answer would be that as a component of both the S&P 500 and Nasdaq 100, if & when COST hits any of all of my price targets will likely depend on if & when the stock market takes a run back down towards & possibly below the March lows. Should the stock market rally another 10-20% in the coming months without much of a correction, that would most likely mean that the economy is recovering at a healthier clip that I thought was likely.
As of now, I think most would find it hard to argue that the recent rally in the stock market is not based on a concrete & validated (via economic data) recovery but rather the expectation that COVID was a one-off event to the economy and that the economy will be back to the same level that is was before COVID hit, and that assumes that the market was fairly valued at the February highs.
Yes, there is the impact of the Fed intervention & support of the markets to factor in (near-term bullish) just as the impact of the massive cost to pay for it (longer-term bearish). Many moving parts to the fundamentals & they can & often do take time to play out. Hence, the reason I will also put a much higher weighting in technical analysis in trying to forecast where the market or a security is headed although the best long-term trades/investments come when both the technicals & fundamentals align (bullish or bearish). Right now, I believe both are bearish on COST for the longer-term (6 months+) although how COST trades in the near-term will likely (but not necessarily) depend on how the broad market trades.

Then you’d be better off with one of the many services out there that throw out generic bullish & bearish calls on a stock or the market without stating when it might get there. Most won’t make specific calls on where a security is headed as well as when they think it will get there & to take it a step further, how that path from point A to point B (final price target) will look, with the major counter-trend & primary trend zigs & zags along the way.

The reason they don’t is they either have no idea how that move might play out (i.e.- the micro-trends/zigs & zags), assuming they are correct and/or they don’t want to risk the inevitable eating of crow every time they are wrong. Personally, I could care less regarding the latter. Although I’m not sure which stock you are referring to, just make sure that you are factoring in any conditionals that might have been attached for a call of a 4% drop such as a breakdown of QQQ and/or the majority of the FAAMG stocks, which has yet to occur. A bearish SETUP is much different from an actionable or current trade, which is one that has triggered a previously highlighted buy or sell signal. No breakdown/breakout, no trade.

I wasn’t aware of that but thanks for sharing. I’ve always felt comfortable trading GLD & using the chart as an accurate proxy for tracking the price of gold. Many of the largest hedge funds will use GLD as a trading proxy for gold & another benefit is the excellent liquidity as it is very widely held & actively traded. However, please keep us posted on anything you come across regarding some potential issues with GLD, including any links to articles. Thanks.

Nice one, thanks!

Agreed. Thanks becky. I’m being a little extra-selective on adding any new official short trades for now, at least until/unless I start to see tech and the majority of the FAAMG stocks breaking down.
XLRN is another nice looking short candidate (biotech stock). In fact, I just had a price alert trigger earlier today when it broke down below this large bearish rising wedge pattern. Thx for pointing out the backtest on SHOP as well as the previous mention.

Good point & that may very well prove to be the case as it often is (obvious bearish patterns during an uptrend suck in shorts & further fuel the rally when the breakdowns fail & the shorts cover). If & when we get QQQ and/or the majority of the FAAMG stocks to trigger breakdowns below the blue support lines that I posted in this morning’s (Friday) update, the odds of bearish chart pattern & support level breakdowns actually sticking should increase substantially. Until then, the intermediate-term uptrend remains bullish as the divergences build & the broad market & many key sectors have rallied into or just below significant resistance levels as the divergences on the momentum indicators point to the likelihood of an imminent trend reversal.

I appreciate the suggestion & you are correct, that is fairly time-consuming, especially considering that I am usually scrambling to annotate the charts & compose the post with all the trade parameters & reasoning behind a trade idea in order to get the post published asap.
Most charting platforms have a percentage measuring tool so if you replicate the levels on my charts or just click & drag to measure from the entry price to the price targets you should be able to get the percentages.
I will also add that historically, I would typically use an R/R of 3:1 or better to the final price target on official trade idea although I’ve noticed an increasing frequency of trades being stopped out just before they turned around & went on to play out to hit the price targets. I suspect that may be due to the proliferation of algo-driven trading in recent years, with certain algos sniffing out the logical stop clusters based on logical/objective & fairly obvious entries on various securities based on well-defined technical patterns, support/resistance levels, breakouts, etc.. As such, I’ve been more willing to use R/R’s down to just above 2:1 on certain trades over the past year or so.

“What If You Prepared For A Bear Market And No One Came?”

https://seekingalpha.com/article/4350478-what-you-prepared-for-bear-market-and-no-one-came