Walmart Stock Spikes Higher on Income, and Then it collapses

Retail giant Walmart Inc. (WMT) announced that it beat earnings estimates before the opening bell, the 19 May. The stock gapped higher at the open to $131.99, and ended last week at $124.33, below his semi-pivot at $126.15. The stock is above a golden cross on its daily chart. The weekly chart is neutral.

Walmart stock is up 4.6% year to date, and in the bull market territory to 21.9% above its March 16 low of$ 102. The stock is also 6.8% below its intraday high of $133.38 together on 20 April.

Walmart had a streak of beating earnings per share estimates in seven consecutive quarters. It has come to the end of February. 18 when the retail giant missed expectations. The stock of a component of the Dow Jones Industrial average and is not cheap. Its P/E ratio is 25.05 with a dividend yield of 1.74%, according to the trends.

The daily chart for Walmart

Refinitiv XENITH

The daily chart for Walmart goes back 52 weeks. The stock had been above a cross of gold since Sept. 17, 2018, when the 50-day simple moving average rose above the 200-day simple moving average to indicate that the price increase to come. This buy signal is ended with a false death of the cross, which took place between 25 March and 15 April.

Walmart stock became extremely volatile since the creation of its all-time high of $133.38 April 20. The stock has fallen to its quarterly pivot at $121.14 and then rebounded to $131.99 on the earnings beat.

Walmart ended last week at $124.33, between its quarterly pivot at $121.14 and its semiannual pivot at $126.15. The 50-day and 200-day simple moving averages ended last week at $122.24 and $118.16, respectively.

The weekly chart for Walmart

Refinitiv XENITH

The weekly chart for Walmart is neutral, above its five-week modified moving average at $121.12. The stock is well above its 200-week simple moving average, or “mean reversion”, to $93.40, last tested during the week of July 14, 2017, while the average was $73.34.

The 12 x 3 x 3 weekly slow stochastic reading over the last week fall of 72.25, down from 72.67 May 15. In October 2019, this reading has been above the 90.00 threshold, put the broth in a “swell parabolic bubble” of the training, which has contributed to the decline of the volatility.

Trading strategy: Buy Walmart stock on the weakness of its quarterly and annual pivots at $121.14 and $116.42, respectively, and reduce the holdings on the strength of its semiannual pivot at $126.15.

How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.

The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of May was established based on the April 30 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.

My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.

How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.

The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.

The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore”, which is usually followed by a gain of 10% to 20% over the next three to five months.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.


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