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

Oct 27, 2016 at 1:15 PM
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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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