The early June breakout drove shares of WMT to new all time highs. At the July peak the stock had extended its gain off the 2019 lows to 26%. This powerful move pushed shares back to overbought levels(daily MACD) that have been a headwind before(Aug/Nov highs in 2018). The recent pullback has reached the top band of an important support zone.
The $106.00 area marks a 1/3 retrace of the 2019 range. WMT’s November ’18 peak is also nearby. Last November the stock left behind an ugly downside reversal here just before the year end flush began. The lower band of this zone($104.00) includes the Feb/April/May highs. The last leg of the 2019 rally began after this zone was cleared on June 5th.
We are long WMT in some managed accounts. We are looking to add.
WMT is scheduled to report its Q2 results on Aug. 15(AM).