Wal-Mart hit New High on Earnings Beat
Published on Thursday, 17 May 2012 16:58 Written by David Becker
New York, May 17th (TradersHuddle.com) – Wal-Mart (NYSE: WMT) earned $3.74 billion, or $1.09 per share, in the quarter ended April 30. That compares with $3.39 billion, or 97 cents per share, in the year-ago period. That latest results beat the $1.04 per share expected by analysts. Revenue at stores opened at least a year rose 2.6%, which was above the 1.4% estimate from Wall Street.
Price action was very positive after the earnings release. The stock price surged on the open, gapping higher by nearly 4%, before pushing higher and reaching a 52-week high. The stock sold off toward the close along with the broader markets. A close above the $62 dollar levels signals a breakout on the upside. Resistance is seen near $64, created by an upward sloping trend channel that connects the highs made in March and April. Support on the large retailer is seen near the 50-day moving average at $60.
Momentum increased substantially after Thursday's price action. The MACD (moving average convergence divergence index) surged to .30 which is the highest level seen during the past 6-months. The MACD created a buy signal in mid May were the spread 9the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread. The breakout, after a period of consolidation, created a spike in momentum.
The RSI (relative strength index) which measures over-bought and over-sold levels moved higher printing near 68, which is the upper end of the neutral range for the RSI. During the last 6-months, the RSI has remained in neutral territory.
Price action sliced through the upper end of the Bollinger bands, moving above the Bollinger high which usually designates the top end of a trading range. This movement likely foretells a new trading range for WMT. Additionally, volume surged above the 50-day moving average of volume which confirms investor sentiment.
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