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This stock from the CNBC Stock Draft is forming a ‘cup-and-handle' chart pattern, says Simple Trading's Danielle Shay

This stock from the CNBC Stock Draft is forming a ‘cup-and-handle' chart pattern, says Simple Trading's Danielle Shay

CNBC25-04-2025
Now is the time to get bullish on Costco , according to Danielle Shay, vice president of options at Simpler Trading. Shay joined CNBC's " Power Lunch " on Friday to offer her takes on the retailer, which she deems as the best stock from the 2025 CNBC Stock Draft , as well as what she considers to be the worst pick from the draft and the best name that wasn't chosen. Here were her selections during the segment. Costco Costco, which was picked in the first round during the stock draft by reality TV star Austen Kroll, lost more than 1% this week, and Shay "loves" the name at current trading levels. "If you look at that weekly chart, you're going to see a gorgeous trend, along with the cup-and-handle pattern and a very clear target up at $1,200 a share," she said. A bullish "cup-and-handle" stock trading pattern is formed when its price increases, then declines to establish a base, and then increases again. That pattern could signal a possible buying opportunity. "You have dividends, you have people trying to get deals right now, and it's always packed," Shay continued. COST mountain 2025-04-21 COST, week-to-date Nike Shares of athletic footwear and apparel maker Nike have come under serious pressure in recent years, with Shay noting that the stock has been in a downtrend since 2021. From the start of that year, shares have plunged more than 56%. While Shay acknowledged that investors may want to buy the stock given the view that it's "cheap," she's cautioning against that, selecting it as the worst pick to her from the draft. "You don't want to buy something that's been in a downtrend far before the market correction," she added. According to FactSet, Nike has a forward price-to-earnings ratio of 29 and trades at around $57 per share. Shay advised shorting the name at around $60 to $75 per share, adding that the "path of the least resistance is lower." NKE mountain 2021-01-01 NKE since 2021 Broadcom Although chipmaker Broadcom hasn't gotten as much attention as artificial intelligence darling Nvidia, Shay believes this is the best name that wasn't picked during the draft. The stock has pulled back 17% in 2025 but has surged more than 48% in the past year. "The options market has much better volume now, and when you look at it, it's pulled back very nicely, but it's still holding a weekly trend," she said. AVGO 1Y mountain AVGO, 1-year Shay has a price target on the stock of $250 and $280. That implies nearly 30% upside and 45% upside, respectively, from Friday's close. "This is one that I'm regularly adding to my portfolio," Shay remarked. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today's dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You'll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
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