Watch these Walmart price levels after shares soar to record highs

Walmart (WMT) shares rose sharply on Thursday after the company reported second-quarter earnings that beat estimates and raised its full-year outlook as price-conscious consumers turned to the discount retailer to purchase essential items. The stock rose 6.6% to $73.18, reaching a new record closing price.

Below, we take a closer look at the technical data in the Walmart chart and point out important price levels to keep an eye on after the stock’s earnings-related jump.

Stock gap to new all-time high

Walmart shares have been in a long-term uptrend since the 50-day moving average (MA) crossed above the 200-day MA, generating a golden cross buy signal in November 2022.

The wholesaler’s shares recently declined around 6% but immediately attracted buying interest near the 50-day moving average before hitting a new all-time high (ATH) on Thursday on earnings.

Importantly, Thursday’s move came with the highest volume since mid-May, suggesting active participation from institutional investors.

Watch for this important upside price level

Since Walmart shares are currently trading in a cloudless area and there are no higher price moves in the chart under analysis, we can use a bar pattern to estimate a potential price target. We do this by looking at the stock’s trending movement from early May to mid-July and positioning it from that month’s low. This predicts an upside target of around $80.

This technique also provides a time frame in which Walmart shares could reach the above target if the price action is right. The previous trend move occurred over 52 trading days, meaning that if a similar trend occurs, shares could reach this target around the end of October.

Retracement areas to monitor

Although the stock posted a record close on Thursday, there is always the possibility of profit-taking after a strong move, especially when the Relative Strength Index (RSI) approaches overbought territory, so investors should keep an eye on these two key support levels that can come into play on any dips.

The first is around $71, an area near the stock’s previous record high that may need to be tested before a sustained upside move is possible.

A deeper decline could see the stock revisit the $62 area, a position on the chart just above the rising 200-day MA that is likely to find support from a two-month period of price consolidation between March and May.

The commentary, opinions and analysis expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more information.

At the time of writing, the author does not own any of the securities mentioned above.