Retail — The Store That Wins When Money Is Tight Breaks Its Downtrend

0:00 The Chart Pick of 16 October: retail.

0:05 Hello, I'm the digital version of Thomas Look: his charts, his read, an AI voice.

0:11 A trillion-dollar retailer fell 23.5% from its May record to its August low, punished after a report it beat.

0:20 Since 6 October it is up 10%, the strongest of the consumer names.

0:26 And it has broken the line that capped it since May.

0:30 Said plainly: this is Walmart, the world's largest retailer.

0:35 About 4,600 US stores, Sam's Club, and a growing online and advertising business.

0:42 It is the largest weight in our T1 index of companies worth more than $1 trillion.

0:49 In the AI chain we follow — build, operate, use — it sits firmly at the use end.

0:54 The editor's five-year chart: the rising channel from the 2022 low is intact.

1:01 The steepest line from late 2023 broke in mid-2026.

1:06 The fall from the May record stopped in August on the next, flatter line of the fan.

1:12 And the price has turned up from there.

1:15 This year: the falling line from the May high broke in early October.

1:20 The price then cleared the rising line from the August low.

1:24 At the pick it stood at the line near $118, just under the 200-day average.

1:31 On Thursday it reached $121 during the day and closed $3.5 lower.

1:39 The first push into the $122 floor of February to May was refused.

1:45 The competitors confirm it: the two closest grocery rivals broke their own falling lines.

1:52 And the staples fund is back near its high.

1:55 The editor's wave count: most likely an extended wave 3.

2:00 Wave 3 of the bull market that began in May 2022 at $39.

2:06 The pause since the May record, five months so far, is the longest of that bull market.

2:12 The fall to the August low retraced 38.7% of the rise from December 2023.

2:20 Almost exactly the 38.2% Fibonacci level, at $103.

2:27 Read that way, the pause is a rest before the next leg.

2:30 A close below the August low would put the count in doubt.

2:35 The levels on his charts: the record close at $134.

2:40 And $122, the floor of February to May that turned into the ceiling.

2:46 Below: the 200-day average at $118 and the rising line from August near $114.

2:55 Then $108 to $109, the broken downtrend line and the 50-day average.

3:02 The case: the downtrend is broken.

3:05 Since 6 October it is up 10%, against 6% for the staples sector and a small loss for the S&P 500.

3:15 It wins when money is tight: with prices rising 3.7% a year, shoppers trade down.

3:22 And it uses AI rather than building it.

3:25 Online sales up 23% and advertising up 38% last quarter, with no data centres to pay for.

3:34 The last report, for the quarter to 31 July.

3:38 Revenue up 5.9% to $188 billion, ahead of expectations, and a raised outlook.

3:47 The market looked at one number instead.

3:50 US same-store sales rose 2.6% against 3.5% expected, and the stock fell 9.15% that day.

4:00 At $118 it trades at about 42 times this year's guided earnings.

4:07 A premium price, paid for steady growth and safety.

4:11 What would prove it wrong: a close back below about $108 would turn the breakout into a bounce inside the fall.

4:19 The rotation can reverse: the cloud names report from 28 October.

4:25 Strong AI receipts there, and money can flow back as fast as it came.

4:30 And at 42 times earnings there is little room for another soft same-store-sales number on 19 November.

4:38 The outlook, as a diary view: over the next two to four weeks, a pause toward $114 is likely.

4:46 Holding above it keeps the turn intact.

4:49 Into 19 November, the report decides whether $122 breaks.

4:56 Over twelve months: a close above $122 opens the way back to the record zone near $134.

5:05 The pick is one session old: Walmart closed Friday, 16 October, at $119, up 0.8% from $118.

5:17 That close is above the 200-day average of $118 and still under $122.

5:25 I'll be back.

5:29 … soon.