4 Trade Ideas for Walmart: Bonus Idea

• Posted by Greg Harmon
• on January 13th, 2025

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

Walmart, $WMT, comes into the week rounding up out of a pullback. It moved over the 20 day SMA Friday and has a RSI rising in the bullish zone after a reset lower, while the MACD remains positive and is curling towards a cross up. There is resistance higher at 96. Support lower is at 92 and 89.50. Short interest is low under 1%. The stock pays a dividend with an annual yield of 0.89% and has traded ex-dividend since December 13th.

The company is expected to report earnings next on February 20th. The January options chain shows biggest open interest at the 85 then 90 put strikes, and at 95 then 100 and 90 on the call side. In the February chain there are big blocks of open interest at the 85, 77.50 and 75 put strikes, but much bigger at the 100 and 110 call strikes. Finally, in the March chain the biggest open interest is at the 85 put followed by 75. On the call side it is biggest at 100 above but also 75 below.

Walmart, Ticker: $WMT

Trade Idea 1: Buy the stock on a move over 93.75 with a stop at 89.50.

Trade Idea 2: Buy the stock on a move over 93.75 and add a February 90/85 Put Spread ($1.22) while selling the March 105 Calls (70 cents).

Trade Idea 3: Buy the January/February 95 Call Calendar ($2.43) while selling the February 87.50 Put ($1.23).

Trade Idea 4: Buy the February 85/95/100 Call Spread Risk Reversal (83 cents).

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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 January options expiry and the start of earnings season, saw equity markets show some short term weakness.

Elsewhere look for Gold to continue its rise in consolidation while Crude Oil consolidates in the upper half of a broad range. The US Dollar Index continues to drift to the upside while US Treasuries resume their downtrend. The Shanghai Composite looks to continue the short term move lower while Emerging Markets consolidate continue their downward reversal.

The Volatility Index looks to remain on the edge of low to slightly elevated making the path easier for equity markets to the downside. Their charts are starting to show some cracks on the weekly chart, but with the QQQ remaining strong, on the longer timeframe. On the shorter timeframe the SPY, the QQQ and the IWM all are making lower lows and looking weaking. Use this information as you prepare for the coming week and trad’em well.

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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.

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