Walmart stock offers 20% upside after post-earnings pullback to $115

Walmart's post-earnings pullback to $115 has created a technical setup with more than 20% upside potential and limited downside risk.

Walmart shares traded near $115 Monday, offering a more than 20% upside after the post-earnings selloff created a favorable entry point for long-term investors.

"The pullback has brought the stock back to an important support area where the risk-reward is compelling," said Doug Busch, senior technical analyst at Barron's Investor Circle.

The stock filled the Jan. 9 gap and found support near the rising 200-day simple moving average, which aligns with a prior bull-flag breakout zone near $100. The May 28 doji candle suggests selling pressure may be fading, while the relative strength index has retreated into the mid-40s and may be forming a triple bottom.

From current levels, Busch sees only 2% to 3% additional downside versus longer-term upside potential of more than 20%, creating what he considers a favorable risk-reward setup. A move back toward the prior highs near $135 would represent a gain of about 18% from Monday's close.

Sector Context Supports the Thesis

The consumer staples sector has delivered solid performance in 2026, with the State Street Consumer Staples SPDR ETF gaining more than 7% year to date, ranking it among the better-performing sectors in the S&P 500. Tobacco stocks have led the sector, with Altria Group up about 23% and Philip Morris rising 12%, while beverage names Monster Beverage and Coca-Cola have gained roughly 15% and 14%, respectively. The broad-based gains reflect investors' preference for defensive companies with resilient earnings profiles. Walmart continues to show strong relative performance versus the XLP, as seen in the steadily rising ratio chart.

Weekly Chart Shows Historical Support Levels

On the weekly chart, Walmart is approaching its 50-week simple moving average, an area that has repeatedly attracted buyers during the current bull market. The stock rebounded from this level in the fourth quarter of 2023, early 2024, and most recently during the week ended April 11, 2025, when it formed a bullish engulfing candle and rallied more than 11%. A double top developed following the late-February peak, while a bearish evening star pattern and a bearish engulfing candle two weeks ago highlighted weakening momentum. Even so, the stock has not posted a losing streak longer than two consecutive weeks since the end of 2024.

The failed breakout above the $133.47 cup-with-handle pivot on May 19 was a blemish, lasting just one session before reversing. The strongest breakouts typically work immediately, Busch noted. However, as long as shares remain above $107, the technical outlook remains constructive, with the potential for a move back toward the prior highs near $135.

This article is for informational purposes only and does not constitute investment advice.