Costco Wholesale Corp (COST) pulled off a nice recovery on November 19th, and traders who follow order flow analytics might have seen it coming. The warehouse retailer triggered a Power Inflow alert at 10:19 AM EST when shares hit $879.63, marking what some consider a key bullish signal for the stock.
Here's what makes this interesting: Costco had been having a rough morning, dropping as much as 2% in the opening hour. Then the order flow data started showing something different. Both institutional and retail traders appeared to shift toward the buy side around that $879.63 level, and the stock reversed course in a meaningful way. By the end of the session, shares reached an intraday high of $890.95 and closed at $890.60, finishing up 1.25% for the day.
What's a Power Inflow Signal Anyway?
The Power Inflow alert comes from TradePulse, a proprietary system that monitors order flow activity during the first two hours of trading. Think of it as a way to spot when buying pressure suddenly intensifies, suggesting that traders might be finding an attractive entry point.
Order flow analytics dig into the mechanics of trading by examining volume, timing, and order size across both retail and institutional participants. It's more granular than just looking at price and volume charts. The idea is to understand not just that a stock is moving, but who's moving it and how aggressively. When the data shows a strong trend toward buying activity, it can indicate a higher probability of bullish price movement for the rest of the trading session.
For active traders, these signals can potentially identify moments when sentiment is shifting, especially during periods of price weakness. That's exactly what happened with Costco on this particular morning.
The Numbers Behind Costco's Rally
Let's break down what happened after the Power Inflow signal triggered at $879.63:
• Intraday High: $890.95 (up 1.29% from the signal price)
• Closing Price: $890.60 (up 1.25% from the signal price)
For traders paying attention to order flow data, this represented a potential opportunity to catch the reversal. Anyone who bought shares shortly after the alert could have captured that intraday gain, which demonstrates why some market participants value these real-time analytics tools.
The Costco example illustrates how order flow analysis can reveal bullish momentum even when a stock appears to be struggling. The early morning selloff created the setup, and the shift in buying interest provided the signal. Whether you're a believer in these technical indicators or not, the timing worked out nicely this time around.
Of course, one successful signal doesn't validate an entire methodology, and traders should always remember that past performance doesn't guarantee future results. But for those who incorporate order flow analytics into their trading approach, moments like this are what they're looking for: clear data showing a potential reversal at a specific price level, followed by price action that confirms the signal.