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Walmart Stock to Rally 28% to $184? Let's Look at the Chart

Goldman Sachs analysts are out with a $184 price target on Walmart stock. Let's look at the charts to see how it could get there.

Shares of Walmart  (WMT) - Get Walmart Inc. Report are trading well on Tuesday, up about 2% in the session.

It helps that the overall market is riding a five-day win streak. It also helps that Goldman Sachs analysts came out in support of the country’s largest retailer.

The analysts added Walmart to its Americas Conviction list, while removing Target  (TGT) - Get Target Corporation Report in the process.

"After the recent stock underperformance as we think the company is in a position to take share and do it more profitably into 2022," analyst Kate McShane said.

She assigned the stock a $184 price target, implying almost 30% upside from Monday's close. 

Just a few days ago, BofA analysts came out in support of Walmart and Target, as well as Amazon  (AMZN) - Get Amazon.com, Inc. Report.

Many are bullish on Walmart ahead of the holidays, and while there are supply chain issues, the retailer still plans to hire 150,000 seasonal employees.

Trading Walmart Stock

Daily chart of Walmart stock.

Daily chart of Walmart stock.

Despite Tuesday’s strong price action for Walmart, there’s a bit of hesitancy on the chart.

In February, Walmart stock suffered a nasty gap-down from $144.83. That level has proven significant in the months that have followed.

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Shares are rallying right into this level, along with the 61.8% retracement of the current range. The high from Tuesday nearly tagged the latter before the stock retreated.

Last but not least, the 50-day moving average also comes into play near current levels.

In other words, Walmart stock faces a key area on the charts.

If it can clear $145.75, it opens the door up to $150, followed by resistance between $152.50 and $153.50. Twice now, Walmart has topped out between these levels.

A move to new highs could eventually pave the way to Goldman Sachs' $184 price target. 

On the downside, there’s now an open gap down at $142.

If shares pull back in the coming days, investors will be watching this gap-fill level and the 200-day moving average.

If shares break below the 200-day moving average, sub-$140 could be in play. That doesn’t seem like it should happen, but if the overall market enters another correction, it most certainly is a possibility that Walmart heads lower.

While I don’t expect a prolonged pullback at this point, watch the 21-month moving average, which has been strong support for Walmart stock so far this year.

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