WMT Update

Here is yesterday's update on the WMT Trade Idea in which we are still looking for an entry.

 The high volume and the doji candle in the white box suggested a reversal, which was a bear flag with a recent move above the bear flag, which seems to be a shakeout of the shorts in the bear flag based on technical analysis dogma. Today's daily candle is moving toward a Dark Cloud Cover reversal or maybe a full on bearish engulfing candle, both needed a gap higher to form these very bearish reversal patterns, but we'll have to see what it looks like near the close as volatility reigns king on op-ex.

 This steeper trendline is the shakeout above the bear flag, you can see the bear flag channel below. There were/are several short entry options, one could be up here on what looks to be a possible (near the close if the candle is deeper, WMT lost more ground then a probable) reversal candle. The other entries are more conservative, but higher probability at a break bak in to the bear flag or a break under the bear flag. The nice thing about an entry in this area is you are close to a natural stop above the recent highs.

 WMT hasn't changed at all for the better, the 60 min chart is about the same size negative divergence as the last one that sent WMT gapping lower.

 The 30 min chart has deteriorated as well, both these divergences started around the time of the shakeout move of the bear flag.

 Today we have an interesting head fake move in yellow, these are common before a reversal whether it's a daily, weekly, or 5 min chart.

 The 1 min chart at the head fake move...

 This is a close up of the 1 min chart, so there is the potential for more volatility and swings in WMT, that is why I'd like to see what the close is going to look like before getting too aggressive on a position.

One other metric would be a break of the 60 min Trend Channel that has held the entire shakeout move in WMT, the area is around $60.75, so that's a potential entry for those who are a little more aggressive, however what appears to be "aggressive" is often the safer entry as the stop is very close and you are getting better positioning rather then waiting for the bear flag to break down.