Walmart Beats on Earnings, but Is It a Bargain?

Walmart WMT reported quarterly results Thursday morning, revealing the retailer beat estimates on the top and bottom lines. The retail giant also initiated a third-quarter outlook and raised fiscal 2025 outlook. Impressive.

Let's get a shopping cart and check out the charts.

In this daily bar chart of WMT, below, I can see that prices have been in an uptrend since December. Prices have been trading above the rising 50-day moving average line for most of the last nine months. Thursday's rally should put prices back above the 50-day line. 

The slope of the 200-day line is positive. The On-Balance-Volume (OBV) line has been strong from December to late June. A weaker OBV line since June tells me of a shift from aggressive buying to aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator is below the zero-line, but is likely to quickly reverse to the upside.

In this weekly Japanese candlestick chart of WMT, below, I can see a constructive looking picture. Prices have been trending higher for more than two years. WMT trades above the rising 40-week moving average line. 

The weekly OBV line has posted gains for the past two years, but has faded in the past two months. The MACD oscillator is above the zero-line, but has narrowed toward a take-profits sell signal. This pending sell signal may be postponed with today's strength.

In this daily Point and Figure chart of WMT, below, I can see that prices have reached and exceeded a $60 price target generated by the software.

In this weekly Point and Figure chart of WMT, below, I can see a price target in the $80 area.

Bottom line strategy: The price trend of WMT has been positive, but the pace of the rally has slowed since late May creating a bearish divergence. Traders who may be long WMT should raise stops to $66, but others should not be in a rush to establish new positions.

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