Walmart Inc. (WMT) is trading higher before Tuesday's opening bell in reaction to better-than-anticipated fourth-quarter numbers. I will leave the fundamental comparisons to others and concentrate on the price and volume information from the marketplace -- good old technical analysis. Let's check what things looked like as of Friday's close.
In this daily bar chart of WMT, below, we can see prices were in a strong/positive technical position ahead of Tuesday's earning's release. WMT established an uptrend last week as it made a higher high with its move above its January peak. WMT has been above its flat/bottoming 50-day moving average line since the beginning of this month and above the rising 200-day moving average line since late December. The trading volume since late December has not been impressive or strong, but the daily On-Balance-Volume (OBV) line has been moving higher from the end of December. A rising OBV line is a sign of aggressive buying. The trend-following Moving Average Convergence Divergence (MACD) oscillator has turned up from above the zero line for a fresh outright go-long signal.
In this weekly bar chart of WMT, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line shows a positive trend from September 2017, but a new high for the move up will be constructive/bullish if we get that this week. The weekly MACD oscillator in the lower panel is above the zero line and very close to a bullish crossover and outright go-long signal. Overall, the weekly chart is positive.
In this Point and Figure chart of WMT, below, we can see a recent double-top breakout at $99.37 and an upside price target of $122.13. A trade at $106.54 will be a positive signal on the way higher.
Bottom line strategy: Strength in WMT is likely to help the broad market to move higher. Existing longs should raise sell-stop protection to a close below $94 and additional longs could be considered in the $102-$100 area and above $106. The low $120s is our price target.