Walmart (WMT) stock prices may have reached a near term peak, according to the chart pattern breakout on the daily time frame. As you can see on the chart, the price previously broke above a double bottom reversal formation and extended its rally past the neckline. It also broke above the moving averages on the same time frame, indicating that an uptrend was taking place.
However, that rally may soon be exhausted as the price of Walmart shares is approaching a key resistance level at 79.00. This could be the peak for price in the meantime, as the Fed is looking to reduce stimulus moving forward and possibly hamper spending and demand.
Walmart Stock Price to Reverse
Take note also that the double bottom pattern on Walmart share prices is roughly 200 points, which means that the resulting breakout from the 76.00 mark would be around the same size. Price is already past that rally point, which means that the buying pressure might start to weaken sooner or later.
The next resistance level is located at the 80.00 level, which is also a round number and an inflection point where several sellers might be waiting to short. For now though, price is still moving way above the 50 and 200 SMA (simple moving average) reflecting a continued uptrend.
Walmart plans to open more stores in India, as part of its expansion program in Asia. The company currently operates as a wholesaler in the country and wants to add 50 more stores on top of its 20 operating outlets in India.
The company also announced an e-commerce platform for its stores, hoping to spur sales through the internet and reach a younger consumer base. Should their future business plans turn out to be promising, the stock price may continue to climb until the 80.00 mark but the prospect of reduced stimulus in the U.S. economy could limit its gains to that level.
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