Walmart Inc. (WMT) reported better-than-expected third-quarter numbers here on Thursday morning and it is indicated to open slightly higher, though in this current market environment that is not assured. Walmart is the Stock of the Day at Real Money, so let’s put it under the technical microscope and see what insights we can glean from the buying and selling.
In this daily bar chart of WMT, below, we can see that the price of WMT has strengthened from its May lows. Prices are above the rising 50-day moving average line and above the slower-to-react 200-day line. The 200-day average still has a negative slope from the weak prices back in February through May. The volume pattern does not show any special features or rather bullish features and the On-Balance-Volume (OBV) line moves up and down slightly with the price action. There is some aggressive buying since late June, but it is not particularly strong. Despite the rally from early October, the daily Moving Average Convergence Divergence (MACD) oscillator is crossing to the downside for a take-profits sell signal.
In this weekly bar chart of WMT, below, we can see the rise over the past three years. Prices show an uptrend, but a new high above $110 would help to refresh the uptrend. Prices are above the 40-week moving average line, but the slope of the line is negative. The weekly OBV line shows a rise from last October and looks to be more bullish than the daily line. The weekly MACD oscillator is pointed up from the zero line in a bullish configuration.
In this Point and Figure chart of WMT, below, we can see a predicted price target of $129, but we also see we need a breakout trade at $108.68.
Bottom line strategy: The three charts above look bullish, but the broad market is still in turmoil so a decline to the $100-$98 area on WMT is possible before renewed strength.
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