Walmart
Walmart (WMT) - Flipping The Cart ! - 5/18/2018Unfortunately Walmart is not Amazon and nobody should expect its stock to rise by buying a loss making company in the name of growing market share. Walmart's acquisition of Flipcart ( Indian online seller like Amazon ) is a lottery for Flipcart's owners and headache for Walmart's share holders. Important question is how can one compete with a company which really doesn't want to make profit !! So as the things were standing, in coming years, Flipcart might have gone bankrupt after fighting with Amazon.
In this scenario, WMT can be sucked back to its previous boring range of $60 +/-10. In fact boring ranges of good companies are more easy and lucrative to trade. Can't wait for that !
Walmart Bull + $85 TargetWalmart's earning reports are due within a week and they are coming up as close competitors to Amazon. They recently acquired Flipkart in a needy but brilliant move to try taking more control in the emerging e-commerce market. Given that they were positively skewed to the left and are now facing a negative correlation, it may not look good. However, the recent acquisition of Flipkart, the market share they already owned in the retail industry and the fact that many of their retail competitors are losing ground looks like positive market potential. However, some analyst could claim these as assumptions or informational bias in looking at the outcome of the data. That being said, given the recent trend-lines in price with medium risk, an $85 short call seems imminent and highly likely.
Walmart will go down. E-commerce will win.Walmart can't grow their economy, they have 95% physical stores and 5% e-commerce. Amazon is growing with sales, while Walmart's expectations of profits are not met. Shareholders are losing value in Walmart, and that's why, I think over the next month, or even year, Walmart will fall.
Should Read Their Yearly ReportWas wondering why the sudden decision to close Sam's Club but once you see that Sam's Club has not been generating as much revenue. It all makes sense. Interesting move that makes their numbers look amazing really. So how does this play out in the long run. 1) Closing stores brings down cost since running those stores are not cheap in any way. 2) Makes the math look great. There's a college joke that goes around. If we drop the students with the lowest GPA and transfer them to another school. The GPA of both schools will increase. (Sad through really). They close Sam's club that are doing poorly and in return, the numbers for Sam's Club on paper will increase. As is Sam's Club really did not have a great few year.
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If anything, if you were a shareholder and saw Sam's Club results. You would most likely drop them too. As is Walmart does not have the greatest reputation so increasing wages and closing stores randomly helps them in both front. Wage increase shows their care for their workers and random closure just keeps people guessing. (Which explains why their stocks did not go as high as it should have.)
Anyways, have fun dissecting the rest of the report. Got to go back to class now.
WMT: Picture perfect long setupWMT is offering a very nice entry, after forming a new weekly mode, which implies the strong uptrend is seeing reaccumulation at higher levels.
I'm looking to enter longs at market, at the open, ideally on retrace to the mid point of the green triangle on chart.
Stops should be below 67.40, for example at 66.51, or using 3 times the daily ATR.
Yield is very nice and I think the stock is due for a 11%+ rally still.
Good luck if taking this trade.
If interested in my trading signals, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year.
Cheers,
Ivan Labrie.