Retail giant and component of the Dow Jones Industrial Average Walmart Inc. was a strong momentum stock as 2018 began, but that dynamic turned on a dime after the stock set its all-time intraday high of $109.98 on Jan. 29. At this high, Walmart stock was in an “inflating parabolic bubble” with a weekly stochastic reading above 90 on a scale of 0 to 100. This bubble popped as the stock crashed into bear market territory, where it remains today.
Walmart had been above a “golden cross” between April 21, 2017, when the stock closed at $74.94, and April 26, 2018, when the stock closed at $87.94. Then, a “death cross” formed. A “golden cross” forms when the 50-day simple moving average rises above the 200-day simple moving average and indicates that higher prices lie ahead. A “death cross” forms when the 50-day simple moving average falls below the 200-day simple moving average and indicates that lower prices lie ahead.
Walmart stock closed Tuesday at $84.52, down 3.7% year to date and up 3.1% since trading as low as $81.95 on May 11. The stock is in bear market territory at 23.1% below its 2018 high of $109.98 set on Jan. 29. Analysts expected Walmart to post earnings per share between $1.12 and $1.15 when the company reports earnings before the opening bell on Thursday, May 17. Most observers think that the key to a positive earnings reaction is growth in online sales to close the gap versus Amazon.com, Inc.. Same-store sales are a positive above a growth rate of 2.6%. (See also: Will ‘Survivor’ Walmart’s Global Approach Work?)
Dow component Walmart has a market-neutral P/E ratio of 25.85 and a reasonable dividend yield of 2.46%. …read more
Read more here: Walmart Reports Oversold and Below ‘Death Cross’
Category: WMT, AMZN