Welcome Back to Wal-Mart

• Posted by Greg Harmon
• on January 5th, 2016

Wal-mart stock has been on a straight out mountain bike downhill ride lower since peaking near 91 in January 2015. There was a huge spike down in October on massive volume that now looks like it was full blown capitulation. Why?

The long term chart gives the first clues. The move Tuesday shows 4 significant pieces of information. The first is the price break above that ski slope trend lower. It came close last week but this is the definitive break. That move is also above the 100 day SMA for the first time since March 2015.

The third item is a bit more nuanced. The Bollinger Bands® are both opening to the upside as price rises and the entire range is pointing higher. Finally the momentum indicators are moving positive. The RSI is crossing 60 into bullish territory while the MACD has crossed up and is now positive.

A long term buyer can look at a stop loss at 56, the November low, or add a put spread for protection to that level. With a 3.2% dividend yield as well this is truly one to look at for a long term position.

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