Walmart Trading Strategy After Reporting Solid Earnings

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Walmart Trading Strategy After Reporting Solid Earnings

Walmart
WMT
reported better-than-expected second quarter earnings per share and revenue before the opening bell Tuesday morning, August 17. The retail giant earned $1.78 per share, 21 cents above estimates. Walmart also raised full-year guidance.

The stock closed Monday at $150.75 versus quarterly, semiannual and weekly pivots at $150.14, $150.63 and $151.45, respectively. These levels were crossed several times in trading on Tuesday. The opening low was $149.10 with the day’s high at $152.50. The stock thus stayed below its 52-week high of $153.65 set on December 1, 2020.

The big box retailer has now beaten earnings-per-share estimates in five of the last six quarters. Walmart has a p/e ratio of 25.00% and a dividend yield of 1.47% according to Macrotrends.

The Daily Chart for Walmart

Shares of Walmart declined 17.8% from its December 1, 2020, high of $153.65 to its March 4 low of $126.28. The price gap lower on February 18 was caused by missing earnings-per-share estimates before the open on that day.

On March 26 there was a death cross where the 50-day simple moving average fell below the 200-day simple moving average. The 200-day SMA was a magnet between April 5 and July 30.

Today the stock is on the cusp of confirming a golden cross as the 50-day and 200-day SMAs are converged at $141.59 and $141.67.

The horizontal lines at the lower third of the chart are the annual and monthly value levels at $130.44 and $126.87. The price action over the last five days have crisscrossed around the quarterly, semiannual and weekly pivots at $150.14, $150.63 and $151.45, respectively.

The Weekly Chart for Walmart

The weekly chart for Walmart is positive but overbought with the stock above its five-week modified moving average at $144.75. It’s well above its 200-week simple moving average or reversion to the mean at $114.45. The 12x3x3 weekly slow stochastic reading is rising at 80.28, just above the overbought reading of 80.00.

Trading Strategy: Buy Walmart on weakness to its 200-day simple moving average at $141.67. Reduce holdings on strength to its all-time intraday high at $153.65.

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