Wal-Mart is giving you a second chance to come back

• Posted by Greg Harmon
• on March 16th, 2016

Walmart stock got smacked down hard in 2015. From a peak of about $90 at the start of the year it fell over 38% down to $56. A year later, on January 5th, 2016, it made its first higher high. The start of a reversal. I wrote Welcome Back to Wal-Mart and bought the stock. We are still holding it and have seen almost an 8% gain since. But if you missed that entry you may be getting a second chance to come back to Wal-Mart.

The chart below shows why. The stock has been steadily rising since the low made in November last year. You can also see the first higher high on January 5th this year. Since then it has continued to make higher highs and higher lows. It touched the 200 day SMA for the first time on February 1st. It had not down that since April 15th 2015 prior to that. The first touch knocked the price lower, but then it broke above the 200 day SMA at the end of the month. With a shallow pullback it found support at the 200 day SMA and reversed. It has now created resistance at the $68 price level.

Notice this was the top of the spike down in October as well. A break over the ascending triangle at 68 would give a target of at least 76. This could also be seen as an inverse Head and Shoulders pattern with the neckline at 68. Breaking the neckline gives a price objective to at least 80. Finally, a Golden Cross is about to print. The 50 day SMA crossing up through the 200 day SMA is a bullish signal.

All it needs now is a catalyst to break resistance and start it on its way higher. Perhaps getting the FOMC meeting out of the way will be the key.

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