Wal-Mart has lagged the market (S&P500) and could be about to play "catch-up" since it has fallen into a pattern that implies that sellers have been blowing out of their long position and the psychology around the shares should be nearly completely bearish. The persistent lower-lows and smaller bounces puts bullish market participants into a daze of disappointment and encourages bears and short-sellers to put on their biggest positions.
It looks like WMT is due for a "squeeze" rally to return it to its last 3-month high, or just to the highest range of the last rally high. Either way, outright long WMT or PAIRED with a short in the S&P500 (SPY), is a good way to go. Risk is roughly 3% (using 1% ATR and risking 3 x's a typical ATR of 1%).
Tim 7/2/2014 10:11AM EST 75.69 last +0.41
Comments
Chukkala
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Thanks for the Chart
manijeh.kazemi.33
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thanks for sharing
timwest
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I didn't mean to include the ATR in the chart - either way - it is just informational to size your position. Use 3x's the ATR to place at least some protective stop on the position from your entry.