The Best Walmart Stock Nears Key Support
Walmart Inc. Shares of (WMT) have fallen more than 12% since the start of the week after the company reported worse-than-expected fourth-quarter financial results. Revenue rose 4.1% to.136.3 billion, beating consensus estimates by $ 1.39 billion, but earnings per share only reached $ 1.33 and skipped consensus estimates by four cents per share. The company’s full-year earnings guidance also came in at $ 4.75 to.5.00 per share, below expectations of $ 5.13 per share.
Aside from the mediocre guidance, the company’s e-commerce growth came in at just 23%, which was considerably lower than the roughly 40% growth seen in recent quarters. Management mainly attributed the slower growth to the acquisition of Jet.com which added scale, but anticipates that the growth rate will rise back to the 40% range after the first quarter. Full-year e-commerce sales are still up 44% from the previous year. (SEE ALSO: Walmart sellers in control after Miss earnings.)
Technical chart showing the performance of Walmart Inc. Actions (WMT)
From a technical point of view, the stock broke from the support of the trend line earlier this month, recovered to the pivot point and fell back to key support levels. The Relative Strength Index (RSI) appears oversold at 31.71, but the Moving Average Convergence Divergence (MACD) remains in a bearish downtrend. These two technical indicators suggest that the stock could see some consolidation and a possible move even lower if the trend is reversed in the long run.
Traders should be on the lookout for some consolidation above trend line support levels after closing the gap dating back to mid-November. If the stock breaks down from these levels, it could hit the 200-day moving average at around $ 86.21 or reaction lows at around alrededor 77.50. If the stock bounces, traders should be on the lookout for a move to S1 support and the 50-day moving average around $ 100.00 upwards.