This one is totally counterintuitive.
Often the market does things which seemingly don't make a lot of sense. A stock will go up despite substantial headwinds and/or headline risk. Or a company that's executing successfully will have a stock that just keeps dropping in excruciating fashion. This is just one way the market takes money from the crowd.
Enter...WMT- Wal Mart. A company facing several headwinds in a world of rising gas prices. First off, those gas prices especially hurt the low-end, or value-conscious, consumers WMT thrives off. If any company relies on trucking it's WMT so they face price pressures there too. For good measure, they are widely hated and have little to no growth.
The share price of this underperformer is pretty much where it was in 1999. More recently, WMT has traded in a range between $50 and $41. For two years. The only excitement for the bulls was a false breakout in October of last year. Well, it just surmounted $50 again. This breakout seems more likely to lead to higher prices but you'll know it's another false signal if it closes much below $49.
Disclaimer: The author does own this stock and is not a broker. In no way should this be considered a recommendation. If you buy this stock, based on this post, the company will go out of business.
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1 comment:
my personal experience tells me that rural florida is lousy with wal mart shipping centers. (after all, theres no other jobs in central FL save for tourism in orlando, right?)
poor people who already go to wal mart--they gotsa keep going to wally world for their durable goods, no?
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