Walmart Volatility Off April Highs, Here’s How To Trade It Now

(Photo by Jeff Zelevansky)

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Walmart WMT[4] traded as high as £160.77 on April 21, then traded as low as £117.27 on May 20. Since this low the stock traded as high as £142.72 on August 17. Walmart has tested its annual pivot at £134.77 several times since January 28, 2022.

Today the stock is trading below this key level. During this decline Walmart missed earnings estimates on May 17. This explains the gaps lower that are shown on its daily chart below.

Despite this volatility the weekly chart remains positive. The retail giant has a p/e ratio of 22.24% and a dividend yield of 1.67%, according to Macrotrends. Over the last seven quarters the company missed earnings-per-share estimates twice.

The Daily Chart for Walmart

Daily Chart for Walmart

Courtesy of Refinitiv XENITH

The daily chart for Walmart shows its strong rally coming to an end at £160.77 on April 21. The stock failed to hold its 50-day simple moving average on May 12. Shares of Walmart then gapped below its 200-day simple moving average on May 17.

After gapping lower the stock traded as low as £117.27 on May 20. The highest horizontal line is the quarterly risky level at £155.12. The lower two horizontal lines are the annual pivot at £134.77 and the monthly pivot at £134.01.

The 50-day simple moving average crossed below its 200-day SMA on June 13. This death cross remains in play as recent strength to £142.72 on August17 was short-lived. Currently the monthly and annual pivots at £134.01 and £134.77 have been magnets.

The Weekly Chart for Walmart

Weekly Chart for Walmart

Courtesy of Refinitiv Xenith.

The weekly chart for Walmart remains positive on a close today, Friday, August 26 above its five-week modified moving average at £131.59.

The stock is above its 200-week simple moving average, or ‘reversion to the mean’ at £126.99. The 12x3x3 weekly slow stochastic reading is rising at 56.30. This measure scales between 00.00 and 100.00 where readings above 80.00 are overbought and readings below 20.00 are oversold.

Trading Strategy: Buy Walmart on weakness to its 50-day simple moving average at £128.54.

Reduce holdings on strength to its 200-day SMA at £138.18.

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References

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