Walmart Stock Downgraded Amid Struggle to Break Above Key Level

Options traders have remained call-skewed toward Walmart stock

Managing Editor
Jul 25, 2018 at 9:23 AM
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Shares of Walmart Inc (NYSE:WMT) are set to open in the red after the stock received a downgrade to "hold" from "accumulate" and a price-target cut to $92 from $98 at Gordon Haskett. This bearish analyst sentiment is not unusual for Walmart stock, as 13 of the 24 brokerage firms following the retail powerhouse carry tepid "hold" recommendations.

Looking at the charts, WMT has been falling since its late-January record peak of $109.98, already shedding 11% year-to-date to trade at $87.96. Plus, the Dow name has been unable to break above the 120-day moving average, a level which has acted as a ceiling since April. In other news, the company just partnered with Google's Waymo to offer shoppers self-driving services in the Phoenix area.

Looking toward options data, Walmart stock's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 2.89, ranking in the 90th annual percentile. This lofty ratio indicates that calls have been purchased over puts at a faster-than-usual clip during the past 10 weeks.

Echoing this, short-term traders have also been more call-skewed than usual, with WMT's Schaeffer's put/call open interest ratio (SOIR) of 0.60 ranking in the 31st annual percentile. This indicates that near-term call open interest outweighs put open interest by a wider-than-usual margin.

Lastly, those looking to purchase near-term options may want to do so with WMT. The Dow stock's Schaeffer's Volatility Index (SVI) of 22% ranks in the 26th annual percentile, indicating short-term options are pricing in relatively low volatility expectations at the moment.

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