Skip to main content

Wal-Mart plunges to 3-year low: chart update

Wal-Mart's ($WMT) stock plunged 10% lower today, its worst one day drop in six years, after the company detailed its increased operating expenses and projected lower earnings (click for slides and EPS projections) for its 2017 fiscal year. 

Let's check out the price action and the trends. Wal-Mart daily chart (below). WMT is down 10% this afternoon.
Wal-Mart stock WMT daily chart


This latest drop on heavy volume brings WMT to a new 3-year low, as the stock hits levels not seen since mid 2012. As you'll note from the monthly chart I shared earlier this week on Twitter, WMT has fallen back into its decade-long trading range, below $70.

 
We first highlighted Wal-Mart's drop and retail weakness back in August. See the chart + tweet below.


 
Today's plunge is in line with the downtrend in place since early 2015. After making new highs above $90 in January, Wal-Mart (WMT) failed to hold above the $80+ level. The stock slipped below its 50 and 200 day moving averages in the spring of 2015 and has continued lower.

"Successful traders always follow the line of least resistance. Follow the trend. The trend is your friend!" - Jesse Livermore (Hat tip: Olivier Tischendorf, Chris Perruna). 

Of course, Wal-Mart's increased spending costs and flat sales come against the backdrop of its longer-term fight with dominant online rival, Amazon. As we increasingly shift to a world of online shopping, big box retailers like Wal-Mart and Target must invest to compete online with Amazon. 

AMZN Amazon stock price chart


Meanwhile AMZN is trading nearer to its all-time high. Amazon's $255 billion market cap now handily exceeds Wal-Mart's $193 billion market cap. While Amazon's stock (AMZN) has increased more than 400% over the course of this bull market, Wal-Mart (WMT) has, as of today, only managed a gain of 20% since 2009. 

WMT stock chart


Wal-Mart's huge growth phase (click the WMT chart to see its 30-fold rise during the 1980s and 1990s) has given way to maturation. Currently, up-and-coming, or dominant, online retailers like Amazon are enjoying their moment in the stock market's sun.
Labels:

Popular posts from this blog

Lessons from Hedge Fund Market Wizards: Scott Ramsey

Today we continue our series, "Lessons from Hedge Fund Market Wizards" , with a look at Jack Schwager's interview with Scott Ramsey of Denali Asset Management.  Ramsey, a futures trader and CTA who works on the island of St. Croix, spoke to Schwager about his first foray into the markets, his evolution as a trader, and the process he stands by to protect and grow his clients' money. 1) . Ramsey started trading in college. He was roped into the OTC metals market via a broker's ad in the Wall St. Journal. The broker charged customers a flat fee to buy and sell as much as they wanted in a particular market for six month. At the time, Scott was a novice and didn't know about futures, so he traded metals in this fashion through the inflationary run-up of the late 1970s. 2) . Scott had to rethink his trading strategy after he bought silver at $50 an oz., only to watch it collapse to $26 following a long string of limit-down days. He sold as soon as the market...
Read more

How to "Pull the Trigger" on Your Trading Ideas

In our last post, I quoted hedge fund manager, Jim Leitner on the importance of following up on your investment ideas.  Today I'd like to follow up and share some thoughts on how you can learn to consistently "pull the trigger" on your best trading setups and investing ideas. In order to help you do that, we'll take from the best and offer up key insights from interviews with top traders and trading psychologists like Alan Farley, Brett Steenbarger, and Doug Hirschhorn .  Now before we get to their key insights on overcoming trading anxiety and pulling the trigger on your trading ideas, let's remember what Jim Leitner said in his interview: "Learn to love to listen to people and when you hear something interesting, follow up on it. Don't just think, "Well that's an interesting idea" only to find out a year later that the company you could've bought shares in is now up 500-fold. You never want to say woulda, coulda, shoulda...
Read more

Moneyball: How the Red Sox Win Championships

Welcome, readers . T o get the first look at brand new posts (like the following piece) and to receive our exclusive email list updates, please subscribe to the Finance Trends Newsletter .   The Boston Red Sox won their fourth World Series title of t he 21st century this we ek. Having won their first Se ries in 86 years back in 200 4, the last decade-plus has marked a very strong return to form for one of baseball's oldest big league clubs. So how did they do it? Quick background: in late 2002, team own er and hedge fund manager, John W. Henry (with his partners ) bought the Boston Red Sox and its historic Fenway Park for a reported sum of $ 695 million. Henry and Co. quickly set out to find their ideal General Manager (GM) to help turn around their newly acquired, ailing ship. This brings us to one of my fav orite scenes from the 2011 film , Moneyball , in which John W. Henry (played by Ar liss Howard) attempts to woo Oakland A's GM Billy Beane (Brad Pi...
Read more