Blue-Chip Retailer Among Worst Stocks to Own in February

Options traders already see the writing on the wall

Digital Content Manager
Feb 3, 2022 at 1:00 PM
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Wall Street has been plagued by volatility since the beginning of 2022, with traders sounding the bearish alarm right before the S&P 500 Index (SPX) pulled back to this key trendline. As investors look to dip back into the market, though, there is one stock in particular they should avoid. Specifically, blue chip Walmart Inc (NYSE:WMT) has been a historical underperformer this time of year. The retail giant recently appeared on Schaeffer's Senior Quantitative Analyst Rocky White's list of 25 worst performing stocks for February, so now seems like a good time to dig into its technical setup.

Worst of Feb 2022

According White's data, which features SPX stocks with the worst returns this month, WMT averaged a loss of 2.3% over the last 10 years, and finished higher just four times. That makes Walmart the only retailer, as well as the worst-blue-chip stock to show up on the list.

At last check, WMT is up 0.2% at $141.10. The shares are bouncing off from a steep pullback to the $133 area, but are already running into pressure at the $142 level. Just below, the 40-day moving average is keeping a tight lid on gains, too. Over the last three months, Walmart stock has shed 6.7%, with the equity now dipping below its year-over-year breakeven level.

WMT 40 Day

Options traders see the writing on the wall. Walmart stock currently sports a 10-day put/call volume ratio of 0.46 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 96% of readings from the past year. This means that while calls are still outnumbering puts on an overall basis, the latter are being picked up at a much quicker-than-usual clip. 


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