Walmart (WMT) – Digital Strength – June 22nd, 2020
Bullish – WMT – $119.85
After a strong start and relatively calm market despite elevated implied, the week ended on a less stable footing after AAPL announced store shutdowns in 4 states. SPY ended just above the 20 D EMA and threatens to retest $300-302 support next week if conditions deteriorate and news of further shutdowns emerge. Our cautiously bullish view is now in question with momentum starting to turn lower.
W Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang looked at WMT as a long term retail play. WMT has been outpacing AMZN in eCommerce and growth by almost double in 2019 and we expect this to accelerate in 2020 due to COVID. Expecting WMT to bounce higher off its $118 support, Tony suggests selling a July 31 $118 Put @ $2.83 Credit. As of Friday’s close, this spread was trading at a $2.74 Credit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience.