Walmart Stock Price Levels to Watch After Post-Earnings Surge to Record High

Walmart (WMT) shares were slightly higher Wednesday morning after hitting a new record high yesterday following a strong earnings report from the retail giant.

During the earnings call, CEO Douglas McMillon told analysts that the retailer continues to capture market share gains from higher-income households, adding that he expects the trend to last as these consumers have embraced the company’s membership program and same-day delivery service.

Walmart shares inched higher to around $87 in recent trading, after hitting an all-time high of $88.29 on Tuesday. The stock has gained 65% since the start of the year, handily outpacing the S&P 500’s 23% return over the same period.

Below, we break down the technicals on Walmart’s chart and identify important post-earnings price levels that investors may be watching.

Shooting Star Signals Potential Reversal

After bottoming out just below the 200-day moving average in December last year, Walmart shares have tracked higher, with two breakaway gaps separating three distinct trending moves.

Although the stock rallied to a new all-time high (ATH) on Tuesday, it closed near its opening price to form a shooting star, a reversal candlestick pattern, which comprises a small body with a long upper shadow that appears after an extended uptrend.

It’s also worth pointing out that the shooting star pattern formed on the highest daily volume since late September, possibly indicating buying exhaustion.

Below we identify three major support levels on Walmart’s chart and also apply a bars pattern to analyze the stock’s current uptrend.

Major Support Levels to Watch

The first key lower level to watch sits around $81. This area may provide support near a trendline that connects a range of similar trading levels on the chart between mid-September and late October.

A close below this level opens the door for a decline to the $71 region, a location on the chart where investors could seek buying opportunities near the prominent July swing high. Depending on the timing of such a move, this area could also potentially align with the rising 200-day MA.

Further selling could see the shares fill the mid-May gap and revisit major support around $61. Bargain hunters may look for buy-and-hold opportunities in this area near twin peaks that formed on the chart during March.

Bars Pattern Analysis

Investors can use a bars pattern to gain insight about the stock’s third trending period, which appears to closely resemble the first trending phase. 

To forecast a target using the tool, we take the price bars from that first move and position them from the low of the third trending period. This projects a target of around $89, just above the stock’s ATH set on Tuesday.

Further analysis of the first trending move shows that it played out over 69 trading days before the shares consolidated. Interestingly, the current move higher has trended over 67 trading days, indicating the stock may be about to enter a consolidation phase if price history rhymes.

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As of the date this article was written, the author does not own any of the above securities.