3 Must-Watch Levels For Wal-Mart Stores, Inc., Tiffany & Co. Traders

WMT and TIF are close to technical levels that could determine their near-term fates

Dec 29, 2016 at 3:11 PM
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In recent week, we've been looking closely at stocks approaching key retracement and Fibonacci levels, which often signal a pending change of direction. Not long ago, several miners were drawing near to these technically significant areas. This time around, a number of retail stocks caught our attention, including Wal-Mart Stores, Inc. (NYSE:WMT) and Tiffany & Co. (NYSE:TIF).

At $69.30, WMT is approaching not one, but two, key retracement levels. Below, you can see the stock is hovering just below the 38.2% Fibonacci retracement of its early 2015 highs and late-2015 lows, which sits a hair south of the round-number $70 level. With peak call open interest at the overhead January 2017 70 and 72.50 strikes -- totaling roughly 56,000 contracts -- the shares could be staring up at several layers of resistance in this region.

wmt weekly dec 29

That said, Wal-Mart Stores, Inc. could also be approaching a foothold. Taking the chart back a bit farther to the financial crisis, the stock is nearing the 50% retracement of its 2009 low and 2015 high, located just south of $69. In fact, the shares have tested this level several times in the last two months, before successfully settling above it -- a more encouraging sign for bulls.

wmt monthly dec 29

Turning to TIF, the stock has been in free-fall since its Dec. 8 high at $85.44, last seen at $77.53. Even yesterday's bull gap by this luxury retailer failed to bolster Tiffany shares. Things could get even worse next month, too. Based on this study, the shares have been positive in just two of the past 10 Januaries. On average, TIF has lost 7.3% during the month, over the last decade.

But not all hope is lost. Currently, Tiffany & Co. is testing the 38.2% retracement of its early 2015 high and mid-2016 low, which hasn't been breached on a weekly closing basis in over a month. In November, in fact, TIF stock bounced from this level to make a run at $85, which eventually ran out of gas. In other words, traders will want to keep an eye trained on this area to see if it holds through week's end, or shows signs of giving out.

tif weekly dec 29

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