Walmart Inc. (NYSE:WMT) has posted an impressive 10% in just one month. We called for a buy on a retracement as the stock breached the key resistance at $151. The stock retreated after touching a high of $157, opening more buy trades. The stock again breached the $157 level and is now heading higher, currently trading at $160.50.
Notable news, including an announced increase in dividend in February, has been boosting Walmart. Lately, news emerged that Walmart had inked a deal with Plug Power to supply liquid green hydrogen.
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The fuel will power Walmart’s trucks at its distribution and fulfillment centers. The stock has been surging since the news, which came on April 19. At the current trading, Walmart is trading above a pivot area of $157, where the stock faced some resistance. Is it now time to buy?
WMT heads to new highs after breaking above $157
Technically, Walmart stock is on bullish momentum. Since mid-February, it has been trading on a pattern of higher highs and higher lows. After breaking above the $157 pivot, the stock could touch new highs.
Nonetheless, a RSI reading of 71 points to an overbought stock. Although this does not signal an immediate drop, we urge caution as the stock could retrace back. Therefore, we urge buying a potential retracement towards the region between $151 and $157.
Summary
Walmart is very bullish and could go higher in the next few days. However, the stock appears overbought, and a potential retracement could occur before the bullish move continues. Investors should consider buying the stock on a retracement towards the breakout zone and pivot level.
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Source: https://invezz.com/news/2022/04/21/overbought-walmart-breakouts-pivot-level-but-consider-buying-on-a-retracement/