Walmart Inc. (WMT) has rallied from lows in May and June into late November. Prices moved above the 50-day and 200-day moving average lines in late October. The slopes of both the 50-day and the 200-day moving averages turned positive in November and we can see a buy signal from the golden cross -- the 50-day line crossed above the 200-day moving average line. Trading volume has roughly declined from May, but the math-driven On-Balance-Volume (OBV) line shows a bullish rise from May. The Moving Average Convergence Divergence (MACD) oscillator turned bullish in late July but it has crossed to a take profit sell signal recently.
In this weekly Japanese candlestick chart of WMT, below, we can see a top reversal pattern in November. Top reversals can be a turn from up to down or a turn from up to sideways. WMT is trading above the rising 40-week moving average line. The weekly OBV line shows a bottom pattern and a turn higher from October, but the rise in the OBV line is much less than the price rally. The MACD oscillator is bullish.
In this daily Point and Figure chart of WMT, below, we can see an upside price target in the $174 area.
In this weekly Point and Figure chart of WMT, below, we can see a target in the $205 area. A trade at $160.21 is needed to refresh the uptrend.
Bottom line strategy: The top reversal pattern on the weekly Japanese candlestick chart (above) has me concerned and cautious. Prices may only pull back in a shallow correction toward $145-$140 or it could be deeper. You never know for certain.
