Blue-Chip Retail Stock Has Room to Run

Walmart stock's longer-term chart sports a bullish technical setup

Jun 28, 2024 at 9:59 AM

Subscribers to Schaeffer's Weekend Trader options recommendation service received this WMT commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

The shares of Walmart Inc (NYSE:WMT) hit a record high on Friday, following a brief period of consolidation into their 20-day moving average. On the longer-term monthly graph, the equity broke above a trendline connecting multiple highs since 2014. With this solid technical foundation in place, we’re recommending a new long position on WMT.

Walmart stock’s Schaeffer’s put/call open interest ratio (SOIR) increased from 0.87 to 0.91 after that record high, meaning an unwinding of this pessimism could create more tailwinds for the equity. Plus, short interest rose 26% in the first half of May, and there’s been a slight roll over after earnings.

Our recommended August call has a leverage ratio of 10.72, and will double on a 9.32% pop in the underlying security.

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