Walmart Inc. (WMT) is showing improvement on the charts. I can see a trade to the upside now. Let's look at the latest charts and indicators to give you a balanced risk/reward strategy for the retail giant, which earned a mention Tuesday night from Jim Cramer on "Mad Money."
In this daily bar chart of WMT, below, I can see that prices have stabilized since March, and after some bottoming action in May and June we are seeing prices move higher. WMT is now above the rising 50-day simple moving average line. WMT is below the rising 200-day average line, but a rally of just a few more dollars will put this retailer above that indicator, too.
The daily On-Balance-Volume (OBV) line was in a decline from February to the middle of June, suggesting to us that sellers of WMT were more aggressive, with heavier volume figures on days when the stock closed lower. Since the middle of June the OBV line has been flat, suggesting at least a balance now between bulls and bears. A rising OBV line would be more positive. The daily Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in early July for an outright go-long signal.
In this weekly bar chart of WMT, below, we can see an uptrend over the past three years. The sell-off this year looks like a correction within a longer-term rise. Prices are below the cresting 40-week moving average line and it will take only a weekly close above $92 to put WMT above the line. The weekly OBV line is more bullish than the daily line; it is showing a rise from March and is now close to its January zenith. The weekly MACD oscillator has just signaled a cover-shorts buy.
In this Point and Figure chart of WMT, below, we can see a base pattern and that a trade at $89.96 would be an upside breakout. A price target around $96 is being projected for now.
Bottom line strategy: Traders could go long WMT at current levels and add on strength. Risk below $84 for now, looking for a rally into the $95-$100 area.