Short Trade Idea
Enter your short position between $123.37 (Friday’s intra-day low) and $127.57 (Friday’s intra-day high).
Market Index Analysis
Walmart (NASDAQ:WMT) is a member of the Dow Jones Industrial Average Index, the S&P 100 Index, and the S&P 500 Index.
All three indices recorded fresh all-time highs, but bullish trading volumes remain below average, hinting at potential issues ahead.
The Bull Bear Power Indicator for the NASDAQ 100 Index surged into extremely bullish territory, suggesting excessive bullishness vulnerable to a reversal.
Market Sentiment Analysis
Equity futures are retreating this morning after the US-Iran tensions re-escalated following the capture of an Iranian vessel by the US. The Strait of Hormuz is closed again. President Trump renewed his threats to target Iranian energy facilities and civil infrastructure unless Iran listens to US demands. Oil is nearing $90 per barrel, while gold resumes its sell-off. Earnings from Tesla, Intel, and United Airlines highlight this week’s earnings calendar.
Walmart Fundamental Analysis
Walmart is one of the largest companies by revenue globally, the largest private employer, and the largest publicly traded family-owned company. It has over 10,000 stores operating under more than 45 names in 24 countries.
So, why am I bearish on WMT at current levels?
Valuations remain excessive, pricing shares to perfection, but margin pressures could trigger a correction if its first quarter earnings release includes a gross margin miss. I remain bearish on the tariff-related impacts, as Walmart sources heavily from Asia and management has already warned of higher tariff costs. I am also bullish on rising competition from discount retailers, while Walmart faces structural challenges from rising operating costs.
Metric | Value | Verdict |
P/E Ratio | 46.70 | Bearish |
P/B Ratio | 10.20 | Bearish |
PEG Ratio | 4.78 | Bearish |
Current Ratio | 0.79 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
Walmart Fundamental Analysis Snapshot
The price-to-earnings (P/E) ratio of 46.70 makes WMT an expensive stock. By comparison, the P/E ratio for the S&P 500 Index is 25.66.
The average analyst price target for WMT is $136.44. This suggests moderate upside potential with elevated downside risk.
Walmart Technical Analysis
Today’s WMT Signal
Walmart Price Chart
The WMT D1 chart shows price action inside a bearish price channel.
It also shows price action between its ascending 50.0% and 61.8% Fibonacci Retracement Fan levels.
The Bull Bear Power Indicator is bearish and remains below its descending trendline.
The average bullish trading volumes are higher than the average bearish trading volumes, suggesting more short-term volatility ahead.
WMT underperformed the S&P 500 Index during the recent rally, a bearish confirmation.
My WMT Short Stock Trade
WMT Entry Level: Between $123.37 and $127.57
WMT Take Profit: Between $98.88 and $102.68
WMT Stop Loss: Between $134.65 and $136.44
Risk/Reward Ratio: 2.17
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