Global Courant 2023-04-15 16:23:46
Trouble could be ahead for Walmart, a stock that outperforms major market indices. According to engineer Carter Worth, the charts suggest the stock is on the verge of a major rollback. “Walmart has been outperforming since 2022… (The stock) is back at a tough level where overhead comes into play,” Worth Charting’s founder and CEO said in a research note last Thursday. “We’re sellers here.” Worth sees particular problems for the stock at $140. He notes that shares of the big box store “hit a major interim low” last June 16. The shares eventually bounced back and have since risen more than 24%. During a “Fast Money” discussion on Worth’s call, trader Tim Seymour presented his strategy at Walmart. “I’m long Walmart and I’ve sold upside calls for about $160,” he said on Thursday’s show. “I was called away on a few lower.” Trader Karen Finerman seems wary of the stock’s price. “The P/E is high, but it’s actually not as high as it seems because they’ve been spending, spending, spending,” she said. “They can shorten that if they want, but it’s kind of like no man’s land for me.” Walmart hit the headlines last week. It announced plans to abruptly close four stores in Chicago due to underperformance. In addition, new government data from Friday showed that the macro picture for retailers is deteriorating. Retail sales fell 1% in March – a bigger drop than Wall Street had expected. Non-automotive retail sales saw their worst decline since December 2021. Walmart shares fell nearly 2% last week, but are up about 5% so far this year. The company will report its first quarter results on May 18.
Chart analyst Carter Worth sees trouble ahead
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