Wal-Mart Stores Inc. (NYSE: WMT) is back on the chart breakout watch and it has risen at a time that the broader markets have been selling off. The shareholder vote last week was a sign that not enough shareholders care about the bribery or corruption cases in Mexico, particularly considering that business in Latin America is done differently than it is in the United States. Wal-Mart shares are not just back above where they were before the scandal broke… they are breaking out and are close to 52-week highs.
Maybe it is the slowing economy again, or maybe it is that Wal-Mart has tried to better focus on quality and value rather than solely focusing on prices. Shares recently hit a multi-year high of $66.66 and the gain of 0.5% has shares at $65.86. This may be a sad trend when you have to celebrate that Wal-Mart and the dollar stores are still part of a secular theme for the coming decade.
Target Corporation (NYSE: TGT) is also only about 3% from its year high as well, but shareholders currently tend to be more in favor of Wal-Mart. Costco Wholesale Corporation (NASDAQ: COST) is about 5% within its year high as well, but the stock trades at a much higher multiple of earnings than Target or Costco.
Dow Jones showed a technical analysis report from Ladenberg Thalmann on Wal-Mart showing that the first resistance is up around $70 longer-term but that it could reach as high as $80 longer-term. What is interesting is that the Thomson Reuters consensus analyst target is $66.06, and that is more of a fundamental analyst group. If these stars line up properly, the charts are just better than the fundamental analysts are giving Wal-Mart credit for.
We have one other issue to bring up here on Wal-Mart’s stock chart. The prior breakouts were thwarted due first to earnings and then due to the issues down south of the border. We are seeing signs that a near-term topping out is taking place here around the $66 price. Maybe this is just a pause, and it is possible that Wal-Mart is just being used as a source of funds between $65 and $66+ as the shares are hitting multi-year highs. The all-time high is $70.25 plus or minus a few cents.
JON C. OGG