September 6, 2007
Stock Du Jour (WMT) & Random Observations
Selling from the get-go, continued all day, a typical trend day.
Notable New Highs: MS China A (CAF), Denstply (XRAY), Fluor (FLR), Oceaneering Int’l (OII), Onyx Pharma (ONXX), Nuance (NUAN), and Weatherford (WFT).
Notable New Lows: Health Management Assoc (HMA), Coldwater Creek (CWTR), Fifth Third Bancorp (FITB), Blackstone (BX), Finisar (FNSR), and Wal-Mart (WMT).
I’ll feature a monthly chart of Wal-Mart (WMT) for some perspective. The stock price has gone nowhere lo these many years and has massively underperformed the S&P 500 since the start of the new bull market in early 2003. The stock looks dirt cheap to me, but I’m just looking at its numbers and not anticipating a recession. The stock chart is saying that the “support” of many years right around $42 may give way.
This is another case where the chartists would say run away and the fundamentalists would say come to papa.
September 6th, 2007 at 4:42 pm
WMT’s FCF yield is about the same as its dividend yield. For every dollar in incremental revenue it spends about 50c in capex.
September 6th, 2007 at 8:16 pm
I think from looking at that chart that a chartist might be licking his chops as well. While one doesn’t want to test support too many times, it is an area that’s held up well over an extended period of time. I’d agree with you that the chartist would be running, but only if that support is breached. Otherwise, if I believed the chart, I’d wait for a move off of the support area and jump in for the next leg up to 50-52.
(Not that I’m a believer in TA…but sometimes a trader can take advantage of obvious technical plays. :) )
September 6th, 2007 at 8:24 pm
BX does look like a good buy to me at the current price. Any comment on BX?
September 6th, 2007 at 8:50 pm
Volume’s picked up on the latest test. Not a good sign.
September 7th, 2007 at 7:52 am
whaler- all ta is looking for is repeating high percentage patterns- what is funny is fundys do the same just using different inputs….sometimes a trader can tak e advantage of obvious fundamental plays. :O
September 10th, 2007 at 9:14 am
[…] With all these restaurants and retailers on the new lows list it’s pretty obvious that the market is anticipating a recession. I’ll feature a monthly chart of Kohl’s (KSS), which looks a little better than Wal-Mart but it’s the same department store story: Nowhere for lo these many years. […]