Will Walmart shares fall to $132 support after earnings miss?

Februar 19, 2021 10:56

Walmart shares were down more than 6% on Thursday after the world’s biggest retailer posted a fourth-quarter earnings miss. While the retailer’s e-commerce sales in the US grew by 69%, investors were given the warning sign when the company said it expects sales to moderate this year. 

The long-term monthly has been showing signs of extreme bullish positioning in recent years, with a huge acceleration higher over the pandemic period. As investors may already be heavy long, the stock price becomes much more sensitive to negative headlines as short-term, emotional investors scramble for the exit. 

Source: Admiral Markets MetaTrader 5, #WMT, Monthly - Data range: from Aug 1, 2005, to Feb 18, 2021, performed on Feb 18, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

In the long-term, monthly price chart of Walmart’s share price above, the 20-period (blue), 50-period (red) and 100-period (green) exponential moving averages are still pointing higher confirming the overall uptrend. 

However, with the price so overextended from the 20-period moving average, there is the possibility of a pullback towards it. The negative earnings announcement could be the trigger. 

Source: Admiral Markets MetaTrader 5, #WMT, Daily - Data range: from Aug 7, 2019, to Feb 18, 2021, performed on Feb 18, 2021, at 8:35 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

In the daily chart above of Walmart’s share price it’s clear to see the large one-day drop yesterday. Now that sellers are firmly in control, price may move towards the next major horizontal support line at ~$132. 

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