Wal-Mart (WMT)

Company

WMT 1-year chart WMT 1-year chart

"The company Sam built has become the world's number one retailer. Diversification into grocery (Wal-Mart Supercenters and Neighborhood Markets), international operations and membership warehouse clubs (SAM'S CLUBS), has created greater opportunities for growth. But unlike some corporations whose financial growth does not translate into more jobs, Wal-Mart's phenomenal growth has been an engine for making jobs. As of March 31, 2007, the Company had 1,063 Wal-Mart discount stores, 2,285 Supercenters, 582 Sam's Clubs and 116 Neighborhood Markets in the United States. Internationally, the Company operated units in Argentina (14), Brazil (299), Canada (290), China (177), Costa Rica (140), Guatemala (135), Honduras (42), Japan (391), Mexico (903), Nicaragua (40), Puerto Rico (54), El Salvador (63) and the United Kingdom (336)." (company website)

WMT 6-month chart
WMT 6-month chart

Buy

Wal-Mart is the 800-pound gorilla of retail. While the stock has its ups and downs, the trend for most of the last year has been for higher lows. In 2007, the 50-day moving average began rising again, and it has just touched-up with the average again.

  • Price momentum (PPO) — slight slow-down has stabilized
  • Trend (ADX) — fairly weak as buying pressure (+DI) and selling pressure (-DI) have traded-off dominance
  • Relative strength (RSI) — gradual strengthening over past two months
  • Volume — off ever so slightly, but heavily traded at over 13 million shares/day

Based on technical analysis, MarketEdge calls WMT a "Buy" in a "weak upward trend."

Sell

gain Bottom line
1%

Wal-Mart jumped enough today to put it back 50¢ over my purchase price, so I sold — with great relief.

Right after I bought WMT, the shares jumped about $3 over my purchase price, and I was elated, pleased at my timing acumen, etcetera, etcetera, etcetera. Alas, it has been almost all downhill since then. WMT sometimes takes giant-steps, and I found this unnerving. The slightest news is immediately reflected in Wal-Mart stock prices.

When I bought WMT I was looking at the rising lows of its up-and-down cycles over most of the past year. There is also an apparently firm resistance range above $50, since WMT has reached or exceeded that level three times in the last year, always to fall back again. Now an ascending triangle is generally bullish, and stocks often break out when they get near the tip of the triangle, but I decided that I simply don't have the stomach to wait this one out.