Walmart ($WMT) Weekly: In my last post, I had indicated that Walmart is on it's last Elliot Wave (Wave 5) and although it showed potential to go a bit more and extend to about the $82 price, I had pointed out the fact that Wave 5's "can be cut short". I had noted that the technicals appeared to be rolling over, and showing a negative tune - with a ugly H&S pattern forming near the top, and a break below $77 support level would be a good indicator to change in momentum of this stock.
Well, as we all come to know by now, this Wave did come to an abrupt end, with the earthquake magnitude 9.5 of an announcement by Amazon ($AMZN) on Friday of its purchase of Whole Foods ($WFM). $WMT slashed though $77, below the 50 day moving average, retraced and closed out the week at $75.24, right around the end of Wave 4 where it met resistance. I would expect that this stock will go down a bit further to look for support around the $72-72.25 area, which is where the 1.618 fib lies, and as well, has been a support level for this stock historically. This level also happens to be almost the exact 50% way point of this stock's huge decline back in 2015 where it dropped $91 to just hair shy of $56 (see weekly chart below).
So where is $WMY headed? At this point it's unclear but in the immediate term we need to see it find support somewhere; if it manages to find support in the $72 area, then it would probably find itself making a move higher to about the $76-77 area before next moves can be projected. However, if it breaks below this key support at $72, then it will probably makes its way down to $70 and lower. RSI (daily) is near oversold levels, but it's got room to go still, and MACD is just rolling over and may take us farther down in to negative territory. Weekly technicals, however, point to a potential for a more grimmer outcome; but we're not there at this point to make a call. Not yet.
Well, as we all come to know by now, this Wave did come to an abrupt end, with the earthquake magnitude 9.5 of an announcement by Amazon ($AMZN) on Friday of its purchase of Whole Foods ($WFM). $WMT slashed though $77, below the 50 day moving average, retraced and closed out the week at $75.24, right around the end of Wave 4 where it met resistance. I would expect that this stock will go down a bit further to look for support around the $72-72.25 area, which is where the 1.618 fib lies, and as well, has been a support level for this stock historically. This level also happens to be almost the exact 50% way point of this stock's huge decline back in 2015 where it dropped $91 to just hair shy of $56 (see weekly chart below).
So where is $WMY headed? At this point it's unclear but in the immediate term we need to see it find support somewhere; if it manages to find support in the $72 area, then it would probably find itself making a move higher to about the $76-77 area before next moves can be projected. However, if it breaks below this key support at $72, then it will probably makes its way down to $70 and lower. RSI (daily) is near oversold levels, but it's got room to go still, and MACD is just rolling over and may take us farther down in to negative territory. Weekly technicals, however, point to a potential for a more grimmer outcome; but we're not there at this point to make a call. Not yet.