WMT: Upward Breakout on Earnings Tomorrow Morning?
WMT is reporting earnings tomorrow morning before the market opening, and the press leading into the event is already prepping investors to expect a large price movement up. This particular earnings call will report for the period covering the Black Friday sales and after-Christmas clearance sales.
The chart is showing a strong inverted head and shoulders pattern that's almost perfect enough to print out for a textbook on recognizing chart patterns. RSI is still below the overbought zone and climing, and the MACD histogram and ADX/DMI indicators are rising bullish again after a short cooling off period in late January. Volume is clearly rising on price increases with only a minor increase in short interest just barely over 10% the daily average volume.
I'll be getting up early tomorrow to see how this security performs in the pre-market hours, and I plan to hop right on the bandwagon if what I see confirms today's theory.
The chart is showing a strong inverted head and shoulders pattern that's almost perfect enough to print out for a textbook on recognizing chart patterns. RSI is still below the overbought zone and climing, and the MACD histogram and ADX/DMI indicators are rising bullish again after a short cooling off period in late January. Volume is clearly rising on price increases with only a minor increase in short interest just barely over 10% the daily average volume.
I'll be getting up early tomorrow to see how this security performs in the pre-market hours, and I plan to hop right on the bandwagon if what I see confirms today's theory.
Trade closed: stop reached:
This is a prime example of the risks associate with earnings season. This looked like a clear win to me at the open of yesterday, and today my stop got hit when WMT closed their gap back downward. Trade wisely, understand that not every theory will pan out, some theories will require price volatility to settle before a trend works itself out, and don't try to catch a falling knife if your theory exceeds your pre-established risk tolerance.
Comment:
Keep watching this one. The price action is trading flat on the head and shoulder's pattern's neckline, and strong moves upward away from that support level can be a strong indicator of a strong upward breakout after all the news and media have turned to the neck daily darling of the headlines. More cautious traders may wish to wait until the technical indicators provide a stronger buying case.
Comment:
This should be watched. Their momentum is fishtailing back up, and this could be promising if it can break and stay over the neckline as a resistance level.