WMT breaks below 20-day moving average for the first time since July 6th
Walmart Inc. (WMT) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, WMT finished the month 8.03% higher at 129.40 after losing $0.72 (-0.55%) today, underperforming the Dow Indu. (0.44%). Today's close at 129.40 marks the lowest recorded closing price since July 9th. 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 Jul 31, 2020):
Friday's trading range has been $2.47 (1.91%), that's slightly below the last trading month's daily average range of $2.77. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for WMT.
Two candlestick patterns are matching today's price action, the Takuri Line which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Takuri Line showed up on June 25th, WMT actually lost -1.16% on the following trading day.
After trading down to 127.62 earlier during the day, the share bounced off the key technical support level at 127.73 (S1). The failure to close below the support might increase that levels significance as support going forward. The market closed below the 20-day moving average at 129.94 for the first time since July 6th.
Though the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
With prices trading close to this year's high at 134.13, upside momentum might accelerate should Walmart be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. Its common bullish interpretation has been confirmed for Walmart. Out of 57 times, WMT closed higher 54.39% 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 64.91% with an average market move of 1.08%.