Date: 17 May 2019

Strong earnings yesterday have helped investors forget their concerns about the trade war between the US and China. Among others, Walmart, the world’s largest retailer, delivered better-than-expected figures for the first quarter.

Walmart’s continued strong sales growth for the past quarter in online trading in the US played a role in this. Nevertheless, Walmart’s market share of the US online business is likely to be comparatively low compared to its competitors, Amazon and eBay. Also, Walmart’s online sales may compete with Walmart’s physical stores.

Looking at the chart, with Thursday’s candle the market tried to break through the significant structural level in the US$103.35 area and failed. Several times in the past 15 months the market has tried and failed to overcome this hurdle, with a brief exception in November 2018.

For the share to make further progress, the market must break, sustainably upwards through the US$103.35 zone.

On the way further up a structural level in the US$106.75 area could then offer resistance to the market. If the bulls make it through here, the old highs of 29 January 2018 could be the next resistance for the market.

If the bulls already fail again at the US$103.35 zone, the next supporting structural level could be in the US$99.20 area. Further support zones could arise in the US$95.90 and US$92.60 structural regions.

The MACD oscillator formed a bearish intersection at the beginning of the month. The histogram is in negative territory, but after yesterday’s movement, the negative trend shows a tendency to weaken.

WMT.US - daily chart. Source: ActivTrader

WMT.US – Daily Chart | Source: ActivTrader

 

Written by Daniel Schuetz, External Analyst, ActivTrades

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