4 Trade Ideas for Walmart: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Walmart, $WMT, broke higher out of a long ascending triangle, reaching back to June 2020, in April. It was a failed breakout though and out of failed moves come fast moves….in the other direction. It dropped back to support at what was resistance since November and then bounced.

But then a gap down led to an explosive move lower and a bottom in May. That bottom is at the bottom of the ascending triangle. A bounce from there was short lived and it is now back at support. Friday saw relative strength with a move higher. The RSI is holding at a higher low but in the bearish zone with the MACD crossed up and rising.

There is resistance at 123.50 and 124.75 then 128.75 then a gap to 131 followed by 134 and 136.75 before 138.50. Support lower comes at 119 and 117.50 then 114.50 and 110.75 before 107.50. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.84% and will begin trading ex-dividend on August 11th. The company is expected to report earnings next on August 16th.

The June options chain shows biggest open interest at the $5 strikes from 110 to 130 on the put side and at 116. On the call side is biggest at 130. In the July chain open interest is spread from 110 to 130, biggest at 115 on the put side. It is focused at 130 and 135 on the call side. The August chain has open interest spread from 130 to 110 on the put side and from 125 to 145 on the call side.

Walmart, Ticker: $WMT

Trade Idea 1: Buy the stock on a move over 124 with a stop at 119.

Trade Idea 2: Buy the June/August 125 Call Calendar ($3.80) and sell the August 115 Puts ($1.35).

Trade Idea 3: Sell the stock on a move under 119 with a stop at 124.

Trade Idea 4: Buy the July 120/115/110 Put Butterfly ($0.85).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the June options expiration week and the FOMC meeting, saw equity markets had resumed their blood bath moves to the downside and were testing the May lows.

Elsewhere look for Gold to continue its consolidation in the uptrend while Crude Oil drives up to new highs. The US Dollar Index continues its move to the upside while US Treasuries continue their downtrend. The Shanghai Composite looks to continue to move higher while Emerging Markets resume the move to the downside.

The Volatility Index looks to remain elevated making the path easier for equity markets to the downside. And the Dollar Index resuming the uptrend will reinforce this. Their charts also look ugly, especially on the longer timeframe with reversal patterns ending the week with prices back near the lows. They are also synched up and moving in unison now. On the shorter timeframe both the QQQ and SPY are back at May lows but with momentum building. The IWM is not far behind them. All of this suggest more downside in the coming week. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

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