Watching Walmart

At Tricio we look at charts in order to give some insight into investor behaviour and sentiment. The chart below is Walmart (weekly, with 50-week moving average). The company is interesting as it is the largest private employer in the US (and the world, according to Wikipedia!) and can top the list of companies with the largest revenue. As a gauge of US consumer sentiment (‘When the going gets tough, the tough go shopping’ may well define the importance of the US shopper) the share is worth looking at. The US tariff war on the world has US retailers in the crosshairs and Walmart has already said that they will be absorbing some of the higher import costs, but has and will continue to pass on some of the costs to consumers.

An interesting thing is happening right now as the Walmart results on Thursday saw the share sell off a touch. This is most probably a temporary pullback which will be followed by new highs at some stage. However, the fact that the recent push higher stalled shy of breaking above the $105.30 high from earlier this year is worrying. This may be the early start of a potential double top.

Double tops are not that common, and most potential double tops turn out to be bull flags (the trend dominates). Watch this pullback to see if chart support layered from the $94.20 to $90.60 levels holds up, with the 50-week moving average near $92.20 an important indicator to watch in this area as well. If the share price pullback doesn’t draw out buyers, and instead the break lower extends below this area, then the April 2025 low near $79.80 will be key. A break below this should not be seen if all is well in this share, and by extension, the US consumer and economic outlook. But if the April low gives way then another $20/$25 worth of losses may follow on a simple extension measure.

Bulls need to see gains above the $104.72 recent high and a push above the $105.30 February peak. A break above these levels would leave chart extension measures pointing to $110 and then $120.

Gerry Celaya, Chief Strategist