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Walmart shares could continue their record run

Posted on by Kennedy
Walmart shares could continue their record run

Walmart shares could continue their record run

Retail stocks just hit an all-time high

Subscribers to Schaeffer's options recommendation service Weekend Trader received this WMT commentary on Sunday evening along with a detailed options trading recommendation – including full entry and exit parameters. Find out more about why Weekend Trader is one of our most popular options trading services.

Shares of Walmart Inc (NYSE:WMT) hit a new all-time high after holding the +50% year-to-date level and its 20-day moving average through six weeks of consolidation. Now is a good time to speculate with calls.

Despite the solid technical setup, options traders are still bearish. This corresponds to WMT's 50-day put/call volume ratio of 0.77 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), which is more than 90% of annual values makes up. History shows that increased values ​​typically precede positive price movement.

There is growing put open interest (OI) in the 78-82 strike region which could be supportive if it continues, with large overhead call strikes at 90 and 100 potentially becoming magnets on further upside could.

Options are currently attractively priced. The stock's Schaeffer's Volatility Index (SVI) is in the 9th percentile over the past 12 months at 22%. Walmart stock's Schaeffer's Volatility Scorecard (SVS) also stands at 81 out of 100, meaning it often exceeded options traders' volatility expectations over the past year.

Our recommended January 17, 2025 call has a leverage ratio of 9.4 and will double if the underlying stocks rise 10.7%.

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