ROBYN BECK/AFP/Getty

Walmart (WMT - Get Report) stock was fading from its morning highs on Thursday after bursting higher on better-than-expected earnings.

However, shares recovered by the closed, ending higher by 6.1% at $112.69. 

Keep in mind, Walmart is one of the few companies that continues to sidestep the beatdown in the retail sector right now. It's why Jim Cramer anointed Walmart as part of his new WATCH acronym -- which consists of Walmart, Amazon (AMZN - Get Report) , Target (TGT - Get Report) , Costco (COST) and Home Depot (HD - Get Report) .

Despite Thursday's rally, some investors are worried about the ability of Walmart stock's to climb to new highs. But with a strong report and healthy chart that shouldn't be the concern.

Earnings of $1.27 a share topped estimates by 5 cents, while revenue grew 1.9% to $130.4 billion and crushed analysts' expectations by almost $1.1 billion. Comparable-store sales jumped 2.8% vs. estimates of 2.5%, e-commerce sales jumped 39% and best of all management raised its profit outlook.

So the fundamentals clearly check out. Now what about that healthy-looking chart?

Amazon and Home Depot are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN or HD? Learn more now.

Trading Walmart Stock

Weekly chart of Walmart stock.
Weekly chart of Walmart stock.

A glance at the weekly chart shows investors that the trend remains their friend; Walmart stock continues to climb from the lower left to the upper right, exactly as bulls like to see.

However, the stock has been experiencing some selling pressure over the past few weeks as stock market volatility continues to increase. While the 10-week moving average had been guiding the name higher for most of 2019, it gave way at the start of August.

Luckily though, prior resistance near $105 held strong as support. Further, channel support held strong too. This gives me confidence that WMT stock remains a buy-the-dips name. Additionally, with Thursday's rally the stock reclaimed the 10-week moving average, which is currently at $109.33.

So what now? Until WMT stock loses the 10-week moving average, a test of its prior highs near $115 seems possible. Above $115 sends Walmart stock to new highs and a test of channel resistance will then be likely.

Should Walmart stock lose its 10-week moving average, uptrend support and $105 become a must-hold level. Below could send it to the 50-week moving average and below that, long-term uptrend support (purple line) currently near $95 is next. 

Here's the bottom line: Over the 10-week moving average and bulls can stay long. Below it and they need to see shares hold $105.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.