Wal-Mart May Climb to $65 After ‘Breakout:’ Technical Analysis
March 16, 2010, 1:30 AM EDTBy Lu Wang
March 16 (Bloomberg) -- Wal-Mart Stores Inc., the world’s largest retailer, may rise about 17 percent after exceeding its January high on surging volume, according to Janney Montgomery Scott LLC technical analyst Dan Wantrobski.
The Bentonville, Arkansas-based retailer jumped to a 14- month high of $55.42 yesterday as 24.4 million shares changed hands, 74 percent more than its average in the past three months. That lifted Wal-Mart out of a $2.40 trading band in which it has been confined during the past four months. The advance suggests the stock may have enough momentum to climb to about $65, Wantrobski said.
“Wal-Mart appears to be staging a technical breakout,” Wantrobski, Philadelphia-based director of technical research at Janney Montgomery, wrote in a note to clients yesterday. “The potential exists for WMT to trade into the $65 zone,” he said, referring to the company’s stock symbol.
The forecast matched the share-price estimate by Citigroup Inc. analyst Deborah Weinswig, whose upgrade sparked a 2.8 percent rally in Wal-Mart yesterday, the biggest gain in the Dow Jones Industrial Average. The retailer is set to win market share with price cuts, she said. She raised the shares to “buy” from “hold” and increased the target price to $65 from $54.
Wantrobski, who rates the stock a “buy,” said the next resistance level for Wal-Mart is around $58 to $59, and that investors should continue to purchase shares above $52 to $53.
In technical analysis, strategists study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
-- Editors: Joanna Ossinger, Stephen Kleege
To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
