WMT
Wal-Mart is sitting at what should be a strong area of support going into its quarterly ER this Thursday. Strictly technically speaking, this is a convergence of multiple supports that should provide a stop to the selling pressure. There is a horizontal former resistance that should turn support, an uptrend support line, and the 125 MA all in a cluster right around the 105 area. In addition to this, there is a strong short term bullish divergence in the RSI. Typically this is an ideal area to look for a bounce, when the price drops, bounces slightly, then drops further than the initial drop. If the RSI from the secondary drop stays quite a bit higher than from the initial drop in my experience this provides a strong indication of reversal. One final note technically speaking is that WMT recently broke out of a consolidation pattern to reach its ATH's, and this drop represents what many like to think of as an ideal entry point--the retest of the breakout area. Add it all up and it looks like the spot where I want to take my chances going long on Wal-Mart, even knowing the headwinds retail has faced across the board. Because of the expectations of retail difficulties, any sort of surprise positive result will likely send this thing flying well past it's ATH's. So, I have bought some shares here at 105.25 (only 5 shares) and have also took a shot with Sep 20th C120 at .17 apiece (5 contracts). Total risked is only just over 600 bucks, with possible returns far far outweighing possible losses at this point. Stop at 102.5, selling options either worthless or at WMT 115 by end of August. Happy hunting and GLTA!!
Trade active:
Sold Sept 20th C120 for .62 from .20. Turned 100 but Ks into 320 in 2 days hold. Not bad. Will buy these back if it fills gap and finds support. Holding shares longer term. GLTA!