By Doug Busch

Despite lingering concerns about consumer spending and the broader economy, Costco and Walmart Inc. continue to display notable relative strength heading into earnings. Their resilience may reflect an ongoing rotation toward value-oriented and defensive retail names as investors seek stability.

At the same time, the leadership from these mega-cap retailers could also signal a broader expansion of the market rally beyond technology and growth stocks, with institutional money increasingly flowing into companies tied to consistent cash flow, pricing power, and consumer essentials.

With that in mind, let's take a closer look at the daily charts of Costco Wholesale Corporation and Walmart Inc. to see how each stock is technically positioned heading into earnings.

Costco, the global membership-based warehouse retailer, is enjoying a strong 2026, with shares up 27%. On Tuesday, the stock closed at a record high, impressive with data going back to its public debut in December 1985. It is riding a six-session winning streak and, heading into Wednesday, will look to secure its first seven-day run in more than a year.

Looking at the daily chart of Costco, the stock has continued to show strong relative performance versus its main rival BJ's Wholesale over the past year on the ratio chart. Shares have rallied roughly $250 since breaking above a bear flag on Dec. 24, a move successfully retested during the first trading session of 2026. The sharp upside reversal reinforced the idea that failed bearish setups often lead to powerful moves in the opposite direction.

In March, the stock registered a bullish golden cross, and by May its 200-day simple moving average had turned higher, confirming strengthening long-term momentum. The breakout above a cup-base pivot at $1,028.54 on May 13 negated the bearish evening star completed on April 10, while the stock more recently shrugged off a doji printed on May 15, another sign buyers remain in control.

The stock could reach $1,200 by mid-2026, 10% upside from current levels. Given the upcoming earnings report, investors may prefer waiting for a post-earnings pullback closer to the $1,050 area before entering new positions. Remain bullish above $990.

Costco was trading around $1085 Wednesday.

Walmart, the world's second-largest retailer, recently surpassed the $1 trillion market cap milestone and closed at a record high Tuesday, just two days ahead of earnings scheduled for Thursday morning. Since the start of 2025, the stock has shown remarkable consistency, avoiding any weekly losing streak longer than two weeks.

Looking at its daily chart, the stock has held up well on a ratio chart versus Amazon.com, though it has been in a corrective downtrend since mid-February. That weakness is now being tested as price begins to challenge the prior downtrend structure.

Round-number theory has also played a key role, with the $100 level acting as resistance last June--July before flipping into support during October--November. From that area, a bull flag developed and was broken to the upside on Jan. 12 with a 3% gap higher. More recently, a cup-with-handle base formed following a bearish evening star on Feb. 17, and the $133.47 pivot was taken out on Tuesday.

The stock could reach $150 by mid-2026, a 12% gain from current prices. However, with earnings scheduled for Thursday morning, it may be prudent to wait for post-report price action before initiating new positions. Remain bullish above $126.

Walmart was trading around $133 Wednesday.

Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 20, 2026 13:55 ET (17:55 GMT)

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