Walmart (WMT) had a huge day Tuesday, jumping 5% on news of its partnership with OpenAI. We last discussed the stock from a chart perspective back in mid-summer with clients, when we were tracking two developing bullish patterns (shown in green and blue). Neither of those setups ultimately gained traction, but importantly, their risk levels were never violated either, which kept the broader structures intact. That stability allowed this new bullish pattern to form starting in early August — and following Tuesday’s surge, that pattern has now broken out decisively. At this point, WMT can be viewed as having three live bullish patterns simultaneously on the daily chart, with upside targets near $106, $113 and $120, respectively. It’s a rare technical setup, but one that can occur in strong, steady names that lack heavy volatility like WMT. All of that price action since the summer has also helped form the handle of what now appears to be a very large weekly cup-and-handle pattern. Taken together, this formation produces a measured move target all the way up near $130, adding another layer to the stock’s bullish setup. Thus, in total, WMT now has FOUR active bullish patterns. Combined with the OpenAI partnership news, the technical and fundamental backdrops are aligning, suggesting further upside momentum could develop. Simply put, the setup remains bullish and supportive of the recent breakout. Zooming all the way out over the last decade, we can see that this same pattern also appears on the monthly log chart. Despite occurring after a strong move in recent years, the setup closely resembles other multi-year bullish pattern breakouts that took place in 2017, 2019 and 2023. Each of those breakouts saw strong upside follow-through while maintaining the broader uptrend that has been in place since the stock bottomed in late 2015. Putting it all together, there are clearly bullish technical patterns visible across the daily, weekly, and monthly time frames — all unfolding within a long-term uptrend. This represents one of the most constructive technical setups we could ask for at this stage. The next step is straightforward: the stock needs to follow through and begin achieving those upside targets. The main risk lies in a failure to capitalize on these bullish formations. After struggling to fully break out this past summer, another stall here would raise concern. With so many other stocks making new highs and sporting strong momentum, capital could easily rotate elsewhere — and that, quite clearly, would test the patience of current WMT buyers. — Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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