The price of Walmart Inc. (WMT) surged higher Tuesday on reports that the retailer's same-day delivery service, dubbed an "Amazon Prime Killer" by some, is due to launch in July. The service, named Walmart+, is priced at $98 per year, which undercuts Amazon's (AMZN) well-known Prime at $119. It was originally supposed to launch earlier in the year.
It was reported that the service will soon add video entertainment and include other perks such as discounts on gasoline, product deals, reserved delivery and two-hour delivery offers.
Let's check and see how the charts and indicators look here on Wednesday morning.
In this daily bar chart of WMT, below, we can see that prices rallied to a high in April and then corrected lower into early June. Prices traded higher for much of June, hugging the rising 200-day moving average line. On Tuesday WMT shot higher to close above the declining 50-day moving average line. The On-Balance-Volume (OBV) line shows a decline from April to the end of June, telling us that sellers of WMT were more aggressive. More volume was transacted on days when prices closed lower. The trend-following Moving Average Convergence Divergence (MACD) oscillator has recently crossed to the upside for a cover shorts buy signal. A crossing of the zero line does not look far off after Tuesday's rally.
In this weekly bar chart of WMT, below, we can see that prices have been able to maintain an uptrend for the past three years. WMT is trading above the rising 40-week moving average line. The weekly OBV line shows improvement in June but still in a longer-term decline. The MACD oscillator is above the zero line and ready to cross upward for a fresh outright go long signal.
In this daily Point and Figure chart of WMT, below, we can see the recent rally and an upside price target of $145.
In this weekly close-only Point and Figure chart of WMT, below, we can see an upside price target of $152.
Bottom line strategy: If any company can plan and execute a strategy to take business away from Amazon it would be Walmart. The charts and indicators of WMT are constructive. Trade from the long side risking a close below $118. Our price targets are the $145-$152 area.
