The Rise of Walmart Shares in 2024: Key Levels to Watch
Shares of Walmart (WMT) have been on a remarkable upward trajectory in 2024, gaining an impressive 35% so far this year. The retail giant’s stock hit a new record high recently, fueled by positive analyst sentiment regarding its investment in artificial intelligence (AI) and the potential for significant growth in operating income by fiscal 2029. Let’s delve into the technical analysis of Walmart’s stock and identify key levels to monitor as the stock continues its ascent.
Stock Reaches Overbought Territory
After retracing to the 50-week moving average in December, Walmart shares have been on a steady climb, breaking out from a pennant pattern in mid-May on strong volume. However, the relative strength index (RSI) is currently signaling heavily overbought conditions with a reading above 85. Historically, such high RSI levels have preceded significant retracements in the stock price. It’s essential to be cautious as the stock may be due for a pullback in the near term.
To gauge how much further Walmart shares could run before a potential pullback, projecting a move to around $73, just 3.7% above the current price, could provide insight into possible resistance levels.
Identifying Support Levels
During periods of profit-taking, investors often look for lower entry points to buy back into a stock. For Walmart shares, there are several key support levels to watch for potential buying opportunities.
The first level to monitor is around $62, where buyers may step in near the high of the pennant pattern breakout. A breach of this level could see the stock finding support around $55.50, a significant area where previous twin peaks formed between September and November last year.
If the stock experiences a more substantial retracement, it could fall to around $51, where a key trendline turned support and the rising 200-day moving average converge. This level represents a correction of approximately 28% from the current price and could attract bargain hunters looking for a favorable entry point.
When considering these support levels for a potential reversal, keep an eye out for bullish candlestick patterns like hammers or piercing lines to confirm a shift in investor sentiment towards the stock.
Conclusion
As Walmart shares continue their upward trajectory in 2024, it’s crucial for investors to be mindful of potential retracement levels and key support areas where buying interest may emerge. Technical analysis can provide valuable insights into the stock’s movements and help investors make informed decisions about entry and exit points. By monitoring these key levels and staying abreast of market developments, investors can navigate the volatility in the stock market and capitalize on opportunities presented by companies like Walmart.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. The author does not own any securities mentioned in this article.
Original Source: Investopedia
