After consolidating over the past week, there's a good chance that shares of Wal-Mart Inc. are setting up to resume their uptrend. Resistance has become support and that’s typically bullish for a stock. It happens because of the seller's remorse.
Before today's open, Walmart reported second-quarter sales growth of 2.4% year-on-year, to $141 billion, beating the analyst consensus of $136.88 billion.
In January, Walmart crashed into a wall of sellers around the $149 level. They put an end to the rally and drove the stock lower. Many of these sellers thought they made a good decision.
But on Aug. 11, shares broke through this level and traded higher. Now many of these investors think they made a mistake. A number of them decide to buy their shares back, but they will only do so if they can get them for the same price they sold at.
These remorseful sellers place their buy orders at $149. If there are enough of them, it will create support. This has happened here and it could set the stage for another move higher.
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