Toby, WMT has in fact exhibited a classic double top formation at around the $69 level and has support at the $57 area. On no less than 7 occasions has WMT successfully tested the 57 area going back to June 15, 1998. There is also technical support around 50, however IMO the support area around 56-57 appears to be the stronger of the two. On Friday when WMT hit 56 9/16ths there was considerable money flows into WMT (as well as the Dow), and both bounced up quite strongly, which in WMT's case could be considered a very short-term successful test of it's intraday low of 55 1/2 on 9/1.
The stock market has begun to seriously re-appraise the earnings multiple it is willing to pay for stocks. The obstinate US market is pricing in the realization that the U.S. is, in fact, part of a global economy and not operating as an island in the economic world. What has happened in Japan, Asia, Russia, and now Latin America, (and some are saying Canada), has the potential of a "domino effect" on many of the world's more vulnerable economic systems, and in the process, dragging a quite healthy U.S. economy down along with it. We are currently witnessing the re-arrangement or re-positioning of massive flows of money, both international and domestic. IMO, the new paradigm believers are now beginning to re-think their stance.
Walmart is not exempt from this P/E haircut, but it is times like these (and worse) that great fortunes have been made. As we know, Walmart is the pre-eminent retailing force in the world, and it's future growth pretty much assured. It is however only one company in a world market of stocks, and therefore subject to the whim or fancy of greater forces.
Sorry for rambling,
MT |
