Heisenberg
Stock Chartist, Long/Short Ideas
Walmart may be setting up for a big bounce, with its pullback matching the pattern of its last two bottoms. The stock is down about 25% from its all-time high, as it was before both prior bottoms, which also showed RSI divergence. Its forward P/E has fallen from near 40 earlier this year to a more respectable 31, and it is holding just above the psychological $100 level near a prior breakout area. x.comÂ
Walmart looks like a safe-haven play after falling about 25% from its highs, with UBS expecting record Q2 sales when it reports next week. The chart is forming an inverse head-and-shoulders pattern with a 12-point target from the neckline. x.comÂ
Walmart has the strongest fundamentals in retail, with $725B+ of revenue, exploding e-commerce and market-share gains while rivals bleed. It is a defensive cash-printing machine in a shaky economy, and analysts rate it a moderate buy with $140+ targets. x.comÂ
Walmart is too expensive at 47 times earnings and has further to fall over the next few months. x.comÂ
A round-number chase pushed Apple to a $5 trillion valuation. The market did the same with Walmart at $1 trillion earlier this year; it is probably a little early, but this is where an Apple short becomes worth considering. x.comÂ
Walmart keeps compounding through recessions because people never stop eating in bad years; they buy more chicken and less filet, and Walmart sells the chicken. It compounded through the 2001, 2008 and 2020 recessions. Wealth comes from finding a business that never has a truly bad year, not from moonshots. x.comÂ
Walmart's 43.28x earnings multiple makes the stock impossible to buy for a long time. Its historical median is 31.13x, and even at 30x it would not be attractive. x.comÂ
Walmart is ripping higher and is close to its upper price target on the chart. x.comÂ
Tesla's promises keep growing while its fundamentals do not. Revenue has not moved since 2023, EPS is down, and shareholders are being diluted while the CEO collects compensation. Execution keeps slipping, with robotaxis, Mars and EV leadership all behind schedule. Its 3.67% profit margin is in Walmart's range, yet Walmart has about 7x the revenue and grows faster, before even considering valuation. A combination with SpaceX looks like the next marketing scheme. x.comÂ
Walmart is being pumped like a new dot-com company, but its high P/E will need to be matched by revenue growth, which investors will soon realize. x.comÂ
There is a reasonable chance, about 35%, of a 10-15% drawdown in the Nasdaq and Magnificent 7 before year-end, alongside a return of value investing. Jim Chanos' chart reinforces the setup for what triggers a drawdown in tech-dense passive indexes, which buy indiscriminately by market cap when dollars come in and sell the same way when they leave. x.com x.comÂ
