WMT closes above its opening price after recovering from early selling pressure
Walmart Inc. (WMT) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
WMT finished Monday at 123.96 edging lower $0.10 (-0.08%), slightly underperforming the Dow Indu. (0.36%). Trading up to $1.08 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 21st, WMT actually lost -0.53% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (WMT as at Jun 01, 2020):
Monday's trading range has been $2.05 (1.66%), that's slightly below the last trading month's daily average range of $2.56. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for WMT. Prices continued to consolidate within a tight trading range between 121.93 and 124.95 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical resistance level at 124.95 (R1). After having been unable to move above 124.71 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 124.41.
While Walmart is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 124.95 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 121.93 where further sell stops might get triggered. Further selling could move prices lower should the market test May's nearby low at 120.78.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Walmart. Out of 590 times, WMT closed higher 53.90% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.83% with an average market move of 0.56%.