Wal-Mart Stores, Inc. (WMT) Stares Up at Resistance Ahead of Holiday Push

Wal-Mart Stores, Inc. (WMT) is hoping perks like in-store selfie booths will be enough to lure shoppers this holiday season, but the stock is staring up at multiple layers of resistance

by Celeste Taylor

Published on Oct 27, 2016 at 1:15 PM

Wal-Mart Stores, Inc. (NYSE:WMT) is gearing up for the holiday season, and hopes to play hardball against competitors like Target Corporation (NYSE:TGT) and Amazon.com, Inc. (NASDAQ:AMZN) with holiday shopping perks, including ramping up staffing during the holiday rush season, providing in-store selfie booths for customer use, and exclusive toy offerings. On the charts, however, WMT is staring up at multi-layered resistance.

So far for the day, WMT is up 0.2% at $69.73. The stock is looking up at the formerly supportive $72-$75 region, which represents a 50% Fibonacci retracement of WMT's 2015 descent. Adding to its technical woes, WMT's 36-month moving average is also overhead, and has contained the shares' recent rebound attempts. 

161027WMT

 

Option buyers have been especially bullish, with WMT's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 3.62 sitting higher than 93% of all other readings from the past 12 months. In other words, traders have bought to open WMT calls over puts at a healthier-than-usual clip during the past two weeks.

Eight of WMT's top 10 open interest positions are calls, with the 75-strike call home to peak open interest in both the November and December option series. This concentration of option open interest could translate into an added layer of short-term resistance.

Additionally, with seven of 19 analysts rating the shares a "buy" or better, and with only three "sells" on the record, there's plenty of room for another round of negative analyst attention to further weigh on WMT shares. A disappointing earnings report later this month, or a lackluster holiday sales showing could leave Wal-Mart Stores, Inc. (NYSE:WMT) vulnerable to a brokerage backlash.

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