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Wal-Mart trade entered

September 29, 2014

The entry criteria that I set out last week for the long Wal-Mart short NASDAQ 100 trade were met last Thursday.

Wal-Mart (WMT) v NASDAQ 100 Trust (QQQ): Daily chart

WMTQQQ290914

  • The low of 29 August (dashed line) was a bullish RSI divergence above 30 after divergences below 30 had been formed. This matches the RSI divergence criteria
  • The 05 September high of 0.77595 (red line) was broken on Thursday with a close at 0.7788.
  • The trade is entered at this level with a stop loss as a close below the 29 August low (2.8% lower)

Wal-Mart (WMT) v SPDR Consumer Staples (XLP)

WMT V XLP

  • The October 2012 relative high was formed with bearish divergence on the 14 week RSI.
  • For the first time in this relative downtrend, there is bullish RSI divergence (at the August relative low – RSI was fractionally above 30 at the low)
  • This should help WMT be a good pick from the consumer staples sector

 

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