Walmart is set up well heading into earnings next week, says Katie Stockton

Walmart (WMT) gained over 5% last week, indicating strong technical momentum with bullish MACD crossovers and a reversal of its short-term downtrend relative to the S&P 500. The stock is positioned favorably ahead of its August 21st earnings report, with resistance near $105 potentially leading to a $115 target if cleared, and major support at $94. While WMT remains in a strong secular uptrend, long-term momentum has softened, suggesting the current cyclical uptrend may be in its later stages, though the overall technical setup remains favorable.

Analysis

Walmart (WMT) exhibits a strong bullish technical posture following a greater than 5% gain last week, which successfully filled its February price gap. Short and intermediate-term momentum is positive, evidenced by a daily MACD signal and a bullish weekly MACD crossover, suggesting the rally has potential for continuation. Critically, WMT is reversing a period of underperformance relative to the S&P 500 that began in April, with the WMT/SPX ratio reclaiming its 200-day moving average, positioning the stock for potential short-term outperformance. Ahead of its August 21st earnings report, key levels are in focus: a breakout above resistance near $105 could confirm a resumption of the uptrend and target a measured move to approximately $115. Conversely, major support is well-defined near $94, a confluence of the 200-day moving average and the weekly cloud model. While the long-term secular uptrend remains intact, weakening upside momentum and a price stretched above its monthly cloud support suggest WMT may be in the later stages of its cyclical advance, implying future gains may be more modest.

Key Decisions for Investors

• Given the positive short-term technical setup and renewed relative strength versus the S&P 500, investors should monitor for a breakout above the $105 resistance level, which could signal a move towards the $115 target.
• Ahead of the August 21st earnings report, it is prudent to establish risk management parameters around the major technical support level near $94, as a breach of this confluence would invalidate the current bullish thesis.
• Long-term investors should note signs of a maturing cyclical uptrend, including waning long-term momentum, which suggests that while the secular trend is intact, the pace of future appreciation may be more subdued than in prior periods.