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Walmart Inc. Decline may Continue

12/8/2022 3:27 PM

Shares of Walmart Inc., an American company that manages the world's largest wholesale and retail chain, continue to trade within the framework of a long-term uptrend, but this week the price is correcting downward under pressure from the CEO's comments.

So, in an interview with CNBC, McMillon noted that buyers are still experiencing stress due to a serious price increase, which leads to the rejection of expensive purchases and reorientation to essential goods, which, in turn, may affect profit indicators. The head of Walmart Inc. admitted the possibility of a sharp decline in the national economy due to the actions of the US Fed, saying that they are necessary to combat record inflation.

Uncertainty about the regulator's next steps also puts pressure on the issuer's stock quotes. If earlier investors positively assessed the intention of the US Fed to slow down the pace of interest rate hikes at the December meeting, then after the release of strong November labor market data, they fear that if officials do not abandon this decision, then in the future they may lead the indicator to highs exceeding the 5.0% expected now.

The price is testing the middle line of the Bollinger Bands around 149.00 and, if consolidated below it, it will be able to continue to decline to the levels of 143.75 (Murray level [6/8]) and 140.60 (Murray level [6/8], Fibo retracement 38.2%, lower line of the Bollinger Bands). The key for the "bulls" remains the mark of 153.12 (the Murray level [+1/8]), in case of its breakout, growth will resume to the area of 156.25 (the Murray level [+2/8]) and 160.80 (the area of April highs).

Technical indicators do not give a single signal: the Bollinger Bands are directed upwards, confirming the continuation of the upward trend, but the Stochastic has reversed downwards, and the MACD histogram is decreasing in the positive zone, which does not exclude the development of a downward correction.      

Resistance levels: 153.12, 156.25, 160.80. | Support levels: 149.00, 143.75, 140.60.

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