Despite last week's disappointing sales growth outlookWalmart (WMT) - Get Report remains in a very strong position. Last Thursday, the stock was hit hard during the early going as investors aggressively sold shares following the negative guidance. Walmart was off over 5.5% before stabilizing near a very key support area.

Since bottoming near $63 last Thursday, the stock has rebounded nicely and, with the help of Tuesday's 1.3% gain, it has erased all of the Feb. 18 damage. This is very encouraging action in the near term.

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Walmart's selloff last week did very little damage to its improving base. This month, the stock continues to work on its third straight higher monthly low. During this trend, the stock has left behind layers of solid support. Just last week, as selling pressure spiked, one of these support zones held in extremely well. This area included the stock's September low, November high and an upward-sloping 50-day moving average. Following the rebound that followed, it appears Walmart will leave behind a second straight monthly low right at its upward-sloping 50-day moving average.

Walmart is set up well for an upside breakout but still has a key hurdle to concur. Investors should keep a close eye on the $68 level over the next few sessions. The stock's devastating October spike high sits just below this level as well as back-to-back weekly highs in February. A close above this area could unleash quite a breakout.

Until then, Walmart bulls should remain positive on the stock and consider it a low risk buy. A close back below this week's current low of $64.75 would send a clear warning sign the overhead pressure from the stock's declining 200-day moving average remains in control.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long WMT.