How Much Worse Can Wal-Mart Get? (WMT)

Wal-Mart Inc Stores (NYSE:WMT) shares are down 7% in 2009 while its seems like every other stock on the NYSE is positive for the year or at least since March.  Wal-Mart finally reports earnings this week (Nov 12th) and everyone wants to know will the numbers be good?

Wal-Mart seems to be locked in a bit of trading range right now, bouncing between about $49 and $52 a share. The chart for Wal-Mart Stores, Inc. (NYSE:WMT) does not lend itself well to good technical analysis interpretation at the moment as the price is right in the middle of the upper and lower trend lines (blue and purple line in chart below).

According to analysts, Wal-Mart Stores, Inc. (NYSE:WMT) is projected to post a third-quarter gain of 81 cents a share, which is right on target with the estimate 90 days ago. In the year-ago quarter, Wal-Mart earned 77 cents per share on revenue of $97.6 billion. The analysts’ consensus recommendation on the stock is that of a strong BUY.

Wal-Mart remains a strong, long-term company for the U.S. and will be sticking around for years to come. This stock may be a good buy on any weakness that brings the stock down to the $49 level. If by chance earnings disappoint, it might be wise to allow the market to react and then pounce, buying shares at a nice discount. If earnings meet expectation or surprise, then we would anticipate Wal-Mart to continue its gentle uptrend after a gap up in stock price on November 12.

If the reaction is bearish to Wal-Mart's earnings call on Thursday investors may get a chance to buy the stock under $50. Best of luck to shareholders playing the call and for more insight on buying Wal-Mart before Thursday, check out Reasons to Go Long Wal-Mart, RadioShack, and Coach (WMT, RSH, COH).

Disclosure: No positions in any of the securities mentioned in this publication.