WMT, Wal-Mart Stores Inc.

wmt aug 23 2016 bwmt aug 23 2016

Walmart has not been a great winner for us, this time around we hope it will be. This stock is a sell!

It has a very distinct triangle and even if it is not in fact a triangle, it is still a ten year congestion period which in the end was resolved to the upside. Typically, after that, it should return to the lower end of that range, about $43. Obviously it has not done so. Usually that simple means that it will still do that. As it happens that level is pretty well exactly where the stock would go if it is presently in an A-B-C correction. The B of that structure has now retraced 61.8% or so of the initial drop and even though that does not mean that it cannot go higher this is nevertheless a reasonable point to expect a drop.

Fundamentally, something we give very little weight, the bottom 50% of the US population is close to being penniless and these are typically their clientele. Things are getting worse. Dividends for the past 3 or 4 years have been increased to keep the 43 year run going, but only by the smallest of margins. Stock buy-backs are what has kept this stock suspended at these levels, not a very robust situation.