-- Walmart stock is trading lower after despite reporting strong quarterly results. Here's the must-hold level on the charts now --
Shares of Walmart (WMT) are not trading that well on the day, down 3% on Tuesday and making new session lows as we type.
While it's not getting obliterated, bulls were hopeful that the stock could see an upside breakout.
After all, Walmart beat on earnings, revenue and comp-store sales results. Additionally, it raised its full-year 2022 earnings outlook, which also came in ahead of expectations.
Further, Home Depot (HD) also reported earnings this morning and is trading higher by more than 5% to new all-time highs in the process.
It's worth pointing out that the stock has been struggling with the $150 to $152 area for quite some time now. Walmart initially topped $150 in September 2020.
While the S&P 500 is up more than 30% over the last year, Walmart stock is down about 5% over the past 12 months.
That's not what investors are expecting to see with a blue-chip retailer like Walmart.
While the stock has been performing well over the years, it's worth noting that Walmart stock has lagged the S&P 500 over the last three and five year periods as well.
Walmart stock initially traded above $150 in the premarket session. In fact, it even hit $150.99. With a strong report in hands, bulls were looking for a key breakout.
On the chart above, it's clear that the $150 to $152.50 area has been stiff resistance. That's dating back to Q3 2020, but also includes Q4 2020, Q3 2021 and earlier this month on Nov. 5.
Despite an initial premarket gain, Walmart gapped lower at the open and quickly traded below the 50-day moving average.
Once it broke below $145.45, it invited more selling pressure.
Now Walmart has the 200-day moving average and the 10-month moving average on deck. I would consider this a must-hold level on the chart, otherwise it subjects the stock to more potential selling pressure.
In that case, it puts the 21-month moving average in play - which has been strong support in the past - followed by the $135 area.
On the upside, take note of a move back over the 50-day moving average, as it could put the 10-day back in play. However, what we'll really be looking for is a test back into the $150 to $152 area.