Stock Of The Day: Is Walmart Breaking Out?

Walmart Inc.‘s (NYSE:WMT) recent performance reflects a broader trend in the retail sector, where major players are navigating a dynamic market landscape with strategic adaptations. As investors closely monitor these shifts, Walmart’s stock movements highlight potential opportunities and challenges within the industry.

Walmart is trading higher Wednesday. There is a good chance that it is breaking or trading above an important resistance level.

Breaking resistance tends to be a bullish dynamic. It suggests that there is more upside ahead. This is why we have made it our Stock of the Day.

Stocks move because of supply and demand imbalances. If a stock is consolidating or trading sideways, the forces of supply and demand are equal.

But if the demand is greater than supply, meaning that there are more shares to be bought than there are for sale, the stock will move higher. Those who wish to buy will be forced to outbid each other to get the attention of sellers.

This will make the stock go into an uptrend.

When an uptrend reaches resistance, it can end or pause. This is because there is enough, or more than enough, supply to fill all of the demand. Traders can buy as much as they wish without forcing the price higher.

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Sometimes, stocks reverse and trend lower after hitting resistance. As you can see on the chart, this is what happened to Walmart after it reached resistance around $99.50 in May, June, and July.

This happens when some of the people who created the resistance with their sell orders become anxious and impatient. They are afraid that others who wish to sell will be willing to do so at a lower price.

So, they reduce their offering prices. Other anxious and impatient sellers see this and do the same. The result is a snowball effect that drives the price lower.

But sometimes when a stock reaches resistance, the buyers eventually overpower the sellers. This drives the price higher. It is called a breakout.

This tends to be a bullish dynamic that. It could mean that the sellers (supply) are out of the way. They have finished or canceled their orders.

If new demand (buyers) enter the market, they will have no choice but to start outbidding each other again to draw sellers back in.

If this happens with Walmart, it will go higher.

WMT Price Action: Walmart shares were up 4.28% at $103.56 at the time of publication on Wednesday, according to Benzinga Pro.

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