$WMT · Schwab Network · 2026-10-28

Finally, let's move on to Walmart now. Walmart is down today. We're still up about 6.5% this year, and we've actually had a good month. But it is clear that this name has fallen significantly from its highest levels this year.

So, Don, as we evaluate Walmart's trading strategies, are we taking advantage of the fact that it's stuck in this range, and could we see earnings reprice the stock significantly downwards?

You know, this is a really interesting discussion about Walmart and consumer staples in general. Walmart was specifically used as a defensive option. What we have seen over the past two weeks is that trading has been fleeing the semiconductor sector .

The trading ultimately consisted of selling in many technology stocks in general , and they were retreating towards defensive sectors, which of course include Walmart. However, Walmart's stock jumped by more than 15%.

I mean, these are huge moves, guys. Look, in the end it's " Walmart". You know, welcome to Walmart. I know they have online sales, but it's still Walmart. But again, this was a much more defensive option .

I think it has started to decline and I don't think the defensive option will continue to work anymore. So I'm going to take the downside on this deal, and again, that defensive option within the "XLP " fund, which of course represents the basic consumer goods within " Walmart", okay?

It's a very busy deal. It's really crowded. The market has begun to move back towards bonds. They no longer need Walmart. This is a bearish trade, but I'm giving myself the advantage of time here.

I will continue until the options expire on January 15th. The options expire on January 15th. I will buy put options at 115, and sell put options at 105 in return. It is a full $10 sale price difference executed at a discount of $2.60.

Well, I like that. I think it's a counterintuitive stance on a core stock, but I mean, this stock has been fluctuating lately, and I know we've at least recovered from our recent lows, but I like this approach at Walmart.

I really appreciate that, Don. Last but not least, explain the technical aspects here where Walmart has again benefited from this wider rotation, but not enough to make it significantly superior so far this year.

Well, this was one of those safe stocks that investors alternately exited and entered as tech stocks moved . I think we are at that point where technology stocks may take off again, as we have seen in the last couple of days.

This could mean some rotation to get out of Walmart. In addition, we are in the latter half of the earnings cycle here. Walmart announces its results a little later in the cycle.

Therefore, we may see a downward movement. The last few earnings reports have been extremely negative for the stock. Regardless of the short-term highs we have seen. The Relative Strength Index (RSI) is now coming out of that extreme range .

You have this support level at approximately 118, which is being tested a few times here. So, you are forming a somewhat reflexive pattern . The level has not yet been broken .

This stock tends to be somewhat volatile when those levels are broken . Therefore, I don't think it will be a fracture that requires intense scrutiny. I think you're going to see a strong break below the 118 level technically here,