Back in early September WM topped out near $122.00 after a 40% rally off the January 2019 lows. The stock began a healthy pullback shortly after and, with the help of a negative post earnings reaction in late October, retraced 1/3 of the entire 2019 range by early November. WM has been steadily rebounding since but has remained in a narrow range. This range bound action appears to be ending as the week comes to a close.
Some color: WM is working on a second straight higher monthly low after reaching fairly oversold levels in early November.
Last week WM pierced a key overhead trendline. This week shares will close well above the November/December highs as well as the Oct. 23rd post earnings close.
The 200 day moving average, which appeared ready to give way in November and December, has held the last three weekly lows. This is very solid footing for a new rally phase.
WM now has layers of support in place between $114.00 and $112.00. This key zone includes multi week highs in both November and December near the upper band and the upward sloping 200D near the lower band. On the downside, a close back below $110.00 would violate the December lows sending a clear warning sign that the 200 day is broken.
At current levels we regard WM as a low risk buy. We are long the stock in some managed accounts.
Earnings are due Jan. 22(AM).