The big-box retailer has surged 36% in 2019, on track for its best annual performance since 1988 and one of the best performers on the XLP consumer staples ETF.
Watch out for a top here, Piper Jaffray chief market technician Craig Johnson says.
"It looks like a parabolic chart starting to form on both a weekly and a daily basis," Johnson said on CNBCs "Trading Nation " on Thursday. "Im not going to be chasing this stock in here, but Id be waiting for this stock to pull back and reset back toward the rising 40-week moving average. So, take some profits in Costco at this point."
The stock would need to fall 16% to reach its 40-week moving average at around $232. It last traded at that level in March.
Walmart, another top-performing retail stock, looks set to continue its rise, Johnson adds.
"Its a constructive-looking chart. Its now starting to break out to new highs," said Johnson. "We would be a buyer of this breakout. It looks like there is more room for this stock to go. ... Theres probably a move up to about $125."
The retailer could rally another 10% before hitting that $125 level. It would mark another record for the stock.
Walmart has another fan in Mark Tepper, president of Strategic Wealth Partners, who says the stock deserves a far higher multiple.
"You have a company that should be valued more like Amazon and less like Kroger, because theyre really committed to beefing up their digital presence, and theyre doing that by investing in technology, theyre making acquisitions like Jet.com, theyre doing all this stuff so that they can battle Amazon, " he said.
Walmart reported a 37% sales increase in its U.S. ecommerce segment in the first quarter, though that slowed from 63% in the same quarter a year earlier.
Tepper says a slowing economy should also fuel strong topline growth for the company.
"When youre late cycle, its not unusual to expect consumers to begin to trade down, meaning Target shoppers will become Walmart shoppers," said Tepper. "With Walmart, I think youre getting a little bit of Amazon and a little bit of Costco, at a fraction of the multiple."
Walmart trades at 23 times forward earnings compared with Costcos 32 times and Amazons 60 times multiple.
Disclosure: Strategic Wealth Partners holds Walmart.