In the money covered calls on Walmart Stock would have been a great trade for long-term investors and investors who bought stock above $72.50 in this latest run-up of Walmart Stock. As the stock rose but volume did not and as the Overbought Technical indicators began to erode with the decline in Walmart Stock, an investor could have sold in the money covered calls to bring in some income and then considered buying them back on a day like today.
Looking at the volume indicators for 2012, despite analysts pushing Walmart Stock like crazy, volume would indicate that a lot of buyers were sitting out the rise in Walmart Stock so far this year. The only spike in the stock was when it reached above $74.00 and obviously someone was unloading a lot of shares. Let’s hope it was not retail investors who bought the stock above $74, but in all likelihood it was.
If you really wanted to go contrarian here and buy Walmart stock on a deep discount to its highs, you might point to WMT growing earnings through its investment in e-commerce and neighborhood store format. If Walmart’s management grows earnings significantly through an investment in millennial traffic, Walmart stock could be deeply undervalued right now.