After reporting earnings this morning, Walmart Inc (NYSE:WMT) has popped 5% so far today.
Technically, my 4-hour chart shows that WMT has recovered 130% of the recent plunge (7/25) from 133 to 119 in reaction to its guidance warning (strange though that all is forgotten or corrected in just three weeks). The stock is heading for a probe of key Fibonacci recovery resistance lodged from 140 to 145, where we will learn if all of the price action since the May 2022 low at 117.27 represents either a base formation and upside breakout into a new bull phase or a counter-trend rally period within a still-dominant, larger-developing multi-month corrective process.
From the perspective of my longer-term pattern and momentum work shown on my 4+ year daily chart, decades of experience analyzing patterns and pattern symmetry suggest strongly that a bull phase peaked and ended at the April 2022 high at 160.77. Therefore, my sense is that the down-move in WMT from the April 2022 all-time high at 160.77 to the May 2022 low at 117.27 represents the initial "shot over the bow" of a larger-developing, incomplete bear phase that will see a resumption of intense weakness when the current counter-trend strength exhausts itself.
Where might that be?
Let's watch WMT first navigate the down-sloping 200 DMA, now at 138.79 (as of yesterday's close), and if taken out on a closing basis, then navigate the 140-145 Fibonacci Recovery Resistance zone of its entire April-May plunge (shown on my 4-hour chart). If that is successfully hurdled, then we will set our sights and expectations on the 148-150 target zone, where WMT strength will close the still-unfilled down gap left behind in reaction to the mid-May earnings miss.
If WMT reverses sharply lower in a powerful downside reversal signal from 1) 139 (200 DMA area) or 2) 140-145 (Fibonacci Resistance) or 3) 148-150 (5/13/22 Gap-Fill), then my work will be warning me that WMT is extremely vulnerable to another shot over the bow, and will be susceptible to rolling over into a negative period that breaks 117.27 en route to 100.
For the moment, the bulls are in control of WMT, eyeing a test of the down-sloping 200 DMA in the vicinity of 139. Let's watch the action with interest.