Conclusion, Investment Implications, Strategy

Walmart Inc. (WMT) appears to be resuming its June advance following two months of sideways investor indecision.  A sustained rise above the $143.20 area would help confirm this and target an additional 9% rise to $158.20 per share.

Analysis and Rationale

Walmart Inc. (WMT) engages in the retail and wholesale operations in various formats worldwide. The company operates in three segments: Walmart U.S., Walmart International, and Sam’s Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, drugstores, and convenience stores; membership-only warehouse clubs; ecommerce websites, such as walmart.com, walmart.com.mx, asda.com, walmart.ca, flipkart.com, and samsclub.com; and mobile commerce applications. It operates approximately 11,500 stores and various e-commerce Websites under the 56 banners in 27 countries. The company was formerly known as Wal-Mart Stores, Inc. and changed its name to Walmart Inc. in February 2018. Walmart Inc. was founded in 1945 and is based in Bentonville, Arkansas.

Chart 1 below plots WMT daily since June, highlighting its Nov 6th breakout higher from two months of sideways investor indecision.  Despite current price volatility in many individual stocks, WMT has been able to sustain this breakout for the past three sessions.  A sustained rise above the upper boundary of the indecision area, currently at $143.20, would confirm the breakout and target an additional 9% rise to $158.20 per share.

Chart 1

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $141.34 area, a long entry price of $145.50 would provide a 1:3.1 risk/reward ratio (risking $1.00 to make $3.10) with an initial risk of 2.9%.

Table 1


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