Sunday, September 30, 2007

Walmart (WMT): At Critical Levels

People like to use Walmart as a way to gain insight into the American consumer. I don't necessarily agree with it because I think Walmart, while huge in size, is a terribly run company. Their stores are disgusting, their customer service is a joke, and they get way too involved in politics. I avoid Walmart at all costs. It is my personal beleif that, besides Southerners, most people feel the same way I do and a low stock price reflects the company's shortcomings, not the consumer's.

With that on the table, let us assume that Walmart is indeed a good proxy for the American consumer and looking at its technicals is not a total waste of time. So what is the chart telling us? It has finished up a perfected TD Sequential countdown, which means that a change in trend might be at hand. It also looks to be forming an inverted head and shoulders pattern. If WMT can hold this level, look for it to get back into the trading range between 45 and 50. On the other hand, if WMT breaks 42 on a closing basis (the TD Sequential stop loss point) look out below.

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