Shares of Walmart (WMT) jumped higher on Thursday, but closed higher by just 1.4% to $101.31 after the company beat first-quarter earnings expectations.
Walmart is a leader among traditional retailers fighting back against e-commerce players like Amazon (AMZN) , Kohl's (KSS) , Target (TGT) , Costco (COST) and a few others trying to boost their omni-channel efforts in an attempt to keep customers aboard.
For Walmart, it appears to be working. While revenue rose just 1% to $123.93 billion and missed analysts' expectations of $124.51 billion, ex-currency revenue came in north of $125 billion. Further, e-commerce sales surged 37% in the quarter and same-store sales were up another 3.4%. When combined with earnings of $1.13 per share, which easily topped expectations of $1.02 per share, Walmart stock is on the move.
The question now becomes, is this the type of quarter that can propel Walmart stock to new all-time highs?
Trading Walmart Stock
Notice how Walmart stock has behaved over the past few weeks amid the trade-war induced pullback. Shares came off their highs, but only by a few percent. The 50-day moving average held as support and the stock is now retesting that $103 to $104 resistance zone.
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However, that trend of 50-day moving average support has been in play since February. More so, when looking back over the past 10 months, this moving average has clearly acted as both support and resistance, highlighting the importance of this level when trading the stock.
Should resistance keep WMT stock in check, a retest of the 50-day could be in store. If that's the case, many investors will view that as a buying opportunity. If resistance gives way and Walmart stock is able to rally, keep in mind it will need to contend with $106.29, the high from January 2018. Above there, and Walmart can begin a potentially larger breakout.
If resistance stymies Walmart's upside and the 50-day fails to act as support, look to see how it reacts near range support at $96.
Notice that shares are not yet overbought according to the relative strength index (RSI), while momentum is on the cusp of turning in the bulls' favor according to the MACD reading (blue circles). Should the stock market maintain momentum, investors in Walmart may be sitting on some nice gains in the not-too-distant future.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.