Walmart WMT at Critical Support Pivot Planning

May 7, 2015: 2:01 PM CST

Wal-Mart is a component in the Dow Jones Index that is facing a critical support-test of a key level.

In simplest terms, traders can enter at key pivot levels as it offers a low-risk opportunity to play a movement away from a key level.

In this case, WMT faces a support-shelf test where a breakdown targets one lower level while a pivot-reversal higher opens the door to a larger reversal swing to the upside.

Let’s see the levels, opportunity, and targets available to traders now:

As highlighted, the “Pivot Box” is the $75.00 support level (downside target) and the immediate $77.50 level.

Also note the falling parallel trendline channel (blue) from the $90.00 per share level to the $77.50 target.

Ultimately, one of these simple levels must fail with a breakthrough.

For now, we’ll focus on the $77.50 level as a possible short-term pivot with a tradable bounce occurring here (stops under $77.00).

Alternately, a breakdown or shattering of this level – continuing the blue downtrend – opens a tradable sell-swing toward $74.00 again.

The positive momentum divergence hints at a positive reversal but again, manage positions accordingly.

Here’s one more view with indicators and volume added:

We have five reversal candles that developed recently up off the $77.00 level as shown.

However, price failed to break above the falling 20 day EMA currently at $78.16.

A trigger-breakthrough above the 20 day EMA suggests that shares could rally quickly toward the $80.00 price and 50 day EMA confluence target.

If you’re playing long/bullishly, you don’t want to see shares under the $77.00 pivot which would be your stop-loss.

Alternately, if you’re bearish on Walmart and think the downtrend will continue, shattering support here, then look to trigger short on a breakdown under the $77.00 support shelf as price would likely move down toward the $74.00 level which is the lower pivot of the box.

Either way, focus on these key levels and the price targets as price moves away from $77.00 – one way or the other.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

3 Comments

3 Responses to “Walmart WMT at Critical Support Pivot Planning”

  1. Nazar Says:

    We need to be really wise in using Pivot points, it can be extremely profitable, but not used well can easily lead into faulty results, so if we want to make money consistently then we should learn these techniques, I trade with OctaFX broker and they have got cTrader demo contest, it’s an weekly contest with 400 USD prize and not only we can win this handsome prize but also get the much needed knowledge which in my view is bigger thing.

  2. Charting the 3 Weakest Stocks in the Dow Right Now | Afraid to Trade.com Blog Says:

    […] May 7:  Wal-Mart at Critical Support Planning (after supporting, it broke sharply lower to the target) […]

  3. Rauf Says:

    We must be extremely careful with these support levels since they can make us lose badly if it goes against our plans, I am trading with OctaFX broker where I get so much help especially with their rebate program where I am able to earn 15 dollars profits per lot size trade and that too including the losing trade, so that’s truly spectacular and allows me to be working fairly easily which is why I really enjoy dealing with them.