Exactly 2 years ago, Wal-Mart (WMT) was the laughing stock (pun intended) of Wall Street. After hitting an all-time high above $90 to begin 2015, the stock would begin a brutal descent that would ultimately shave some 40% off of its value. At the same time, while the broad stock market was coming off a wicked drop in August-September, it had recovered to a great extent by November. Wal-Mart, on the other hand, as we noted in a post at the time, had Fallen And Could Not Get Up.
That said, we also noted that Support Was On The Way – chart support to be exact. Consider it the Life Alert of the securities industry. Specifically, we noted multiple potential levels of support near the $60 area as displayed on this chart at the time.
As it happens, WMT stock was indeed able to press its “Life Alert button” soon thereafter. Within a few weeks, following a brief dip below that $60 level, the stock began to recover and has been on the mend ever since. And finally in recent days, after 2 long years, Wal-Mart stock was able to climb all the way back above the $90 level, closing at an all-time high for the first time in nearly 3 years.
So in a veritable triage of sickly looking retail stocks, Wal-Mart is at least one bright (blue?) light. Perhaps investors of other retail stocks may take comfort in the fact that while the stock of Wal-Mart, too, was once left fallen and lifeless, all hope is not lost. At some point, these stocks are bound to hit a Life Alert button of their own, i.e., a confluence of significant chart support.
What’s next for Wal-Mart? Is the run over – or will a possible breakout kick-start a new advance well above previous highs. In a Premium Post at The Lyons Share, we provide our objective, technical read on WMT’s chart and the next potential opportunity for WMT investors.
The SPDR S&P Retail ETF (XRT) was unchanged in premarket trading Wednesday. Year-to-date, XRT has declined -9.01%, versus a 16.37% rise in the benchmark S&P 500 index during the same period.
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Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.
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