Walmart – Always Low Prices, Always….Well Maybe Not for Long
- Posted by Greg Harmon
- on May 21st, 2012
A funny thing happened out of this Walmart, $WMT, bribery and corruption scandal. Yes the stock took a hit. But then they reported earnings and gapped back higher. Now it is trading at a 52 week high. Well that is not completely accurate. It is actually trading at a more than 10 year high and an all time high on a dividend adjusted basis. But it is the last candle of the daily weekly and monthly charts that makes the stock so interesting here. Lets take a look.
Walmart, $WMT, Daily
The daily chart above shows the stock breaking above an expanding wedge, or megaphone, that has been in place over the last 5 months. The Relative Strength Index (RSI) is bullish and just touching in the technically overbought area with a Moving Average Convergence Divergence (MACD) indicator that is positive and growing rapidly. There is a caution here as the volume has been falling on this breakout, but the picture is bright with a target on the breakout to 68. but wait there is more. The weekly chart shows strength as well. After breaking above a rising channel from July 2009 through to October 2011, the price retested the channel from above 5 weeks ago and is now moving higher. Also note on this timeframe that the volume is actually increasing over the last
Walmart, $WMT, Weekly
few weeks (last candle is only 1 day). The RSI on the weekly points to more upside, in bullish territory with a current rising trend, and the MACD is about to cross bullishly positive as it broke above a triple top at 62. The target for this leg higher remains at 65.40, from the original break of the channel. But wait there is more. The monthly time is also strong an screaming buy me. The stock has trade in a range between 38.50 and 61.50 for 13 years. Prior to that it had a $30 move higher over the previous 3 years. Now breaking that channel with support from the technical
Walmart, $WMT, Monthly
indicators it has a Measured Move higher to 84.50 on this timeframe. Not too shabby. But even removing all timeframes and looking at a 3 box reversal point and figure chart the upside is big. Breaking a double top the price objective on the Point and Figure chart is 76. So four views with four different targets of 68, 65.40, 84.50 and 76. Average them and you get a move to 73.25, or 16% higher. Not bad for a stock that also pays a 2.6% dividend.
Walmart, $WMT, Point and Figure
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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