New start in WalMart

On this first trading day of 2016 the S&P is down about 400 points.  It’s not a good day to enter new positions just because they are cheaper.

They can easily get even cheaper in the next few days. But when we get large & sudden moves, certain things are noticeable.  As I look at my screen today and see all the negative numbers, one symbol jumps out at me. Most stocks are down 2 or 3 percent today, but WalMart is only down about a half percent. This is the kind of relative strength that becomes visible during heavy selling. WalMart is not being sold off like everything else so I decided to investigate a little deeper.

Looking at our chart of WMT, I see that the stock has very recently changed from a long term Bearish trend that began last February. The chart has changed to Bullish. Not only that, but the stock is right up against long term trendline resistance that goes back to the first week of January 2015. These are powerful and important indicators that don’t show up often. It all seems to be telling us that there is little desire to be selling WalMart and that there is a long-term change of trend beginning to appear.

It’s worth acting on. We are starting a new position in WalMart today by selling cash secured naked puts. Check back tomorrow for a report on today’s action. 

Stay optioned, my friend!


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