Wal-Mart ( WMT) is taking a breather this week, consolidating sideways after a swift rally from the mid-$60s. Even though WMT's recent price action hasn't exactly been riveting lately, there's still a trade to be made in this retail mammoth.
Wal-Mart's price action has been constrained within a rectangle pattern since the uptrend turned sideways. A rectangle is a pattern that's formed by two horizontal price levels: resistance above shares at $79 and support below at $77. Rectangles give traders a chance to catch their breath and figure out their next move after a big share price change. As a result, it makes sense to make a bet in the direction of the breakout from the channel.