4 Trade Ideas for Walmart: Bonus Idea
Walmart, $WMT, comes into the week consolidating under resistance and the all-time high. It is also holding over the 20 day SMA in a slow uptrend since the gap up in August. The RSI is rising in the bullish zone with the MACD flat and positive. There is no resistance above 83. Support lower is at 81.25 and 80.75 then 79. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.01% and will trade ex-dividend on December 13th. The company is expected to report earnings next on November 19th.
The November options chain shows biggest open interest at the 75 strike then 77.50 and 80 on the put side. On the call side it is biggest at 85 then 80. The November 22 Expiry covers the earnings report and has biggest open interest at the 75 then 76 put strikes and at the 85 call strike. The December chain has biggest open interest at the 76.67 then 70 put strikes and spread from 75 to 90 on the call side. Finally, the January chain has biggest open interest at the 80 then 60 puts and at 100 and 105 on the call side.
Walmart, Ticker: $WMT
Trade Idea 1: Buy the stock on a move over 83 with a stop at 80.25.
Trade Idea 2: Buy the stock on a move over 83 and add a November 22 Expiry 82/75 Put Spread ($2.00) while selling the December 90 Calls (95 cents).
Trade Idea 3: Buy the November/December 85 Call Calendar ($1.75) while selling the November 22 Expiry 78 Put ($1.05).
Trade Idea 4: Buy the January 75/85/92.50 Call Spread Risk Reversal (80 cents).
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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with October in the books and heading into the election and FOMC meeting, saw equity markets experienced a Halloween spooking.
Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates at the bottom of a broad range. The US Dollar Index looks to consolidate in its uptrend while US Treasuries pullback in their consolidation. The Shanghai Composite looks to continue the short term move higher while Emerging Markets pullback in their uptrend.
The Volatility Index looks to remain at a neutral level, above the base established this year, likely at least until after the election. This could make for choppy light trading for equity markets to start next week. Their charts look strong on the longer timeframe though. On the shorter timeframe both the QQQ and SPY have reset momentum measures lower and could reverse or turn bearish, likely a couple of days’ time will tell. The IWM does not seem concerned about an election or Fed policy churning sideways. Use this information as you prepare for the coming week and trad’em well.
