Market Overview

PreMarket Prep Stock Of The Day: Walmart

PreMarket Prep Stock Of The Day: Walmart

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

While the broad market is still under considerable selling pressure, there are issues outside of the pharma and bio sectors that are making new all-time-highs. One of them is Walmart Inc (NYSE: WMT).

Simple Logic Works Even In Crazy Markets

An obvious impact of the coronavirus pandemic is that citizens in the U.S. and other countries are preparing for possible quarantines to help reduce the spread of the virus. They are flocking to grocery stores to load up food and other necessary supplies to survive if and when the lockdown is initiated, and because they're staying home to lessen their chance of infection.

With its roughly 5,000 stores throughout the United States as of 2019 and over 400 stores in Canada, Walmart is one of most recognized brands in the world. In addition, the company operates stores in South America, Europe and the United Kingdom. 

Walmart's March 10-16 Price Action

While the broad market was imploding March 10-16, Walmart was being treated like almost every issue and got smashed. From its March 10 close ($119.79), it cascaded to $102 on March 16 and rebounded to end that session at $106.78.

With the hysteria surrounding COVID-19 rapidly accelerating over the last few days, Walmart stores and other similar retailers have been packed with customers. Therefore, investors are anticipating much better-than-expected second-quarter results.

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

DAWN: A New Wall Street Acronym 

Strategic Wealth Partners chief Mark Tepper named Walmart as one of the stocks in his "DAWN" strategy — "it's always darkest before the dawn" — to replace FANG with companies that will benefit from consumers being homebound.

The others in the acronym include: Domino's Pizza, Inc. (NYSE: DPZ) Activision Blizzard, Inc. (NYSE: ATVI) and Netflix Inc. (NASDAQ: NFLX).

Walmart's March 17-19 Price Action

On Tuesday, the issue leaped from $106.76 to $119.26 and reached a new all-time-high in Wednesday's session at $128.08.

So far in Thursday's session, Walmart stock has  challenged that high but came up shy, reaching $127 only before falling back to the $124 area as of 12:30 p.m.

Walmart Moving Forward

Since it is impossible to know how long or deep the COVID-19 crisis will be, it is impossible to predict the continued price action in Walmart.

From a technical perspective, the issue has had an extraordinary move over the last few days. In fact, its trading range over the last four days of $26.08 far exceeds Walmart's average monthly trading over the last 20 years. 

For the rally to continue, investors should focus on the issue continuing to make new all-time-highs and a new all-time-closing high, which occurred Wednesday at $122.58.

Photo courtesy of Walmart. 


Related Articles (WMT)

View Comments and Join the Discussion!

Posted-In: coronavirus Covid-19 e-commerceLong Ideas Short Ideas Technicals Top Stories Trading Ideas Best of Benzinga