Ticker: $WMT
I am terribly inexperienced with tech analysis. I have been able to make some small consistent gains by picking up ATM calls a couple weeks from expiry off of $135 support or below. #WMT
Hello, I am requesting DD and also sharing a play I have had success twice in the recent weeks. This is my first post here and I would be very grateful for any feedback and contribution.
A while back someone on the trading floor posted to Conquerer that Walmart was closing in on $135 support on the yearly chart. Wanting to learn what that meant, I put it on a watch list and sure enough. Now since then it has tested that support several times and usually after a few days to a week bounces up a few dollars. Then comes back down to test again, maybe falling a dollar or two below but then up it goes.
It’s a medium pace mover with no huge volatile jumps and by picking up ATM calls a few weeks out from expiry I’ve been able to make some money on these easily predictable swings in price. A $2.00 contract gets a good %30 when the underlying moves from $134 to $136 on my 3/18 136c. It seems for now to hold pretty nicely in this channel and I’d like to share this for anyone to rip apart and/or help find supporting info that could point to a continuation of this pattern.
Perhaps good for scalps on intraday movement as well, seeing as the same contract swung from 1.72 to 2.80 just today in a couple hours. I am seeing that it can track with SPY a bit (forgive my novice analysis) but only loosely and can move in opposite directions form SPY too. So perhaps this thread will turn into something useful and hopefully I can continue taking profits from this movement.
I have a small account and am recovering from AGC, ESSC 1&2, and am determined to put those learning experiences to use here with this amazing community.
That said, it might be worth separating this out for some longer term swing plays. As for confirming your TA, you are definitely right, it has been in and around that channel for some time. Even with overall positive news on how it is positioning itself against amazon.
Thank you for this, I’ll read up the thread you referenced. I did in fact sell this morning (filled at $3.00 for the $10c)and will again wait for it to dip for a re-entry.
As I’m seeing it come back to $135 area I want to be clear and transparent about the numbers I’ve posted. Particularly the support number. I will begin watching around $135 but have seen it as low as $132. I am keeping y eye on it for a new entry but didn’t want to mislead with my numbers.
Walmart had 2 great trading days. Completely uncorrelated with SPY. I did not think lightening would strike twice and missed entry on these. It is now trading closer to a key resistance point of 145. I’ll be keeping an eye on it next week.
I think we should cross reference this with the value dividends stock. The movement might just coincide with all the fear of war and inflation worries. It was running when powell had the second testimony and there was fear of uncertainty of how many rate hikes.
I am starting to watch closely here, WMT has bumped up into resistance again around $150 and has traded sideways for the first time in a while. Year to date high was achieved this morning and the high prior to that was about $152 in November. I will take a put today that expires in about a month, hoping to ride a nice long swing downward, with plenty of time to adjust if this pumps for another week or two.
Walmart has been looking strong, closed at 151 Friday. It already peaked around 151-153 several times in the past, and while I like to think there’s no reason it shouldn’t do the same, my one hesitation is the constant talk about “inflation” and people are really starting to see a continued increase in grocery and basic goods.
Walmart has two things going for it. First, they are known for their low prices and hence attract all the bargain shoppers. Second, they are able to get those bargain prices because of their massive purchasing power. Doing business with walmart can often make or break a business. So those businesses will find a way to meet walmart’s price demands rather than lose their business. People know this, and they expect walmart to really shine in turbulent times when people tighten their belts.
I want to ride on the put train too, but I’m going to keep a very watchful eye and wait for a reversal that will hopefully come in the next few days. Otherwise if we push past 154 it’s essentially no-man’s land and likely inflation news & fear will drive the stock. We are right in the middle of the quarterly reports too.
Thank you for this post Beaker. Your words crystallize why I am actually bullish on the stock. I’m patiently waiting for another pullback so I can jump on some calls (the original topic of the thread). After I posted regarding a potential pullback this news came out Friday of a price target increase.
“Oppenheimer Adjusts Walmart Price Target to $165 From $150, Maintains Outperform Rating”
It is perhaps one reason for the continued push to higher ytd highs, along with the other reasons you’ve stated. WMT moves like a heard of elephants which is why I like it. I can adjust my contracts without fast movement from the underlying. I am going back to a “wait and see” sentiment on this.
Edit: Thank you for the reminder. Earnings are coming up in May and I’ll need a new thesis based around this but it’s on the radar.
What will be interesting to me this next earnings release will be their membership subscription numbers compared to Amazon and Costco. Walmart continues to make large investments in their delivery service. With Amazon Prime membership going up in cost, some may look for cheaper alternatives. If Walmart continues to grow in that space while Amazon specifically stagnates, I would be even more bullish.
Just popping by since I’ve been super busy with work lately… #WMT has begun a steady SPY correlation since about the time of the Netflix earnings and dump a few weeks ago. This takes it out of my comfort zone as I am not confident in my SPY plays. I expect this correlation to persist at least until earnings premarket on 5/17. I will wait to see about this swing trade thesis until I see some separation from the broader market, as before.
