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    Analytical review of the shares of Wal-Mart Stores Inc. on 19.02.2016

    Wal-Mart Stores Inc., #WMT [NYSE]
    Services, retail, USA

    Financial performance of the company:

    Index – DJIA, S&P 500;
    Beta – 0.22;
    Capitalization – 205.31 В;
    Return on asset - 7.50%;
    Income - 15.09 B;
    Average volume – 11.98 М;
    P/E - 13.76;
    ATR – 1.68.


    Analytical review:

    • The company ranks the second on capitalization in the “Service” sector among the issuers trading in the American stock market
    • Yesterday, the company reported for Q4 of the fiscal year 2016. In the reporting period net profit of the company fell by 8% (from 4.97 billion USD to 4.57 billion USD). Decline in EPS exceeded 6%, from 1.53 USD to 1.43 USD.
    • At the press-conference company’s management said that company’s revenue fell by 1.4% up to 129.7 billion USD, due to strong USD.
    • The company has reduced forecast of the sales volume for 2017 fiscal year. This year the company does not expect the rise in the index. It was expected earlier that the index would rise by 4%.
    • Retailer has increased quarterly dividends to 0.50 USD per share. The rise of the annual dividends amounted to 0.04 USD up to 2.00 USD per share.
    • The company plans to shut down over 260 shops round the world, including 115 shops in Latin America and 150 shops in the USA.

    Summary:

    • Poor performance reflected in the last report will have a negative impact on investors’ confidence to the company’s management. The decline in the company’s shares will be also caused by strong USD, decline in the world economy, reduction of sales and closure of many shops.
    • We expect that company’s quotes will decline.

    Trading tips for CFD of Wal-Mart Stores Inc.

    Medium-term trading:
    following the release of the negative report for Q4 2016, the issuer broke down and consolidated below support level of 65.15 USD. If the level maintains and after testing of the “mirrored” resistance level of 65.15 USD and in case of the respective confirmations (for example, pattern Price Action), we recommend to open short positions. Risk per trade is not more than 1.5% of the capital. Stop order can be placed slightly above the signal line. Take profit in parts at the levels of 64.00 USD, 62.50 USD and 61.00 USD with the use of trailing stop.


    Short-term trading: on the timeframe 15M the issuer is traded between support and resistance levels of 63.50 - 64.75 USD. We recommend to enter the market after breaking down and testing of these levels. Positions can be opened near the signal line and the nearest support/resistance levels. Risk per trade is not more than 2.5% of the capital. Stop order can be placed slightly above/below the signal line. Take profit in parts at the levels of 50%, 30% and 20% USD with the use of trailing stop.



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