Dow Extremes: The Walt Disney Company and Walmart Stores

Walt Disney Co (NYSE:DIS) and Wal-Mart Stores, Inc. (NYSE:WMT) have had decidedly different years

Jun 18, 2015 at 2:24 PM
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It's been an up-and-down year for the Dow Jones Industrial Average (DJIA). As it stands now, the index is holding on to a 1.8% year-to-date lead. Below, we'll look at two of the Dow's 30 components, Walt Disney Co (NYSE:DIS) and Wal-Mart Stores, Inc. (NYSE:WMT), which have been its best- and worst-performing stocks in 2015, respectively. 

With its 1.4% gain today to trade at $113.10, DIS boasts a 20.1% year-to-date lead. This narrowly beats out UnitedHealth Group Inc. (NYSE:UNH), the second-best performing Dow component. Moreover, the shares touched an all-time high of $113.55 earlier.

Similar to fellow blue chips Goldman Sachs Group Inc (NYSE:GS) and Visa Inc (NYSE:V), put buying has picked up recently at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Walt Disney Co's 10-day put/call volume ratio across these exchanges comes in at 0.81, which is higher than 83% of readings taken in the past year.

What's more, the stock remains heavily shorted, as the over 41 million DIS shares controlled by bears represent nearly nine sessions' worth of trading, at its average daily volumes. Even with its already impressive 2015 gains, DIS could go even higher, if some of the weaker bearish hands hit the exits. 

On the opposite end of the spectrum is WMT. Coming into today, the stock was off 15% in 2015, but it was last seen 0.5% higher at $73.07. The shares have been on a steady trek lower since their all-time high of $90.97 on Jan. 13, pressured by their descending 20- and 32-day moving averages.

Perhaps this is why 82% of analysts say Wal-Mart Stores, Inc. is a "hold" or worse. On the other hand, option traders have been betting on a breakout. The security's 10-day call/put volume ratio at the ISE, CBOE, and PHLX comes in at 5.73 -- higher than 93% of similar readings from the past 12 months.

These bulls may be in luck, too. WMT's 14-day Relative Strength Index (RSI) comes in at 35, closing in on oversold territory. Like Walt Disney Co (NYSE:DIS), Wal-Mart Stores, Inc. (NYSE:WMT) could be in store for short-term gains.

 

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