Walmart has recently performed well in the market, bouncing back from last year. An analysis using the Elliott Wave structure shows a clear upward trend with positive momentum. The rally started when Walmart’s stock was between $86 and $77, as buyers jumped in during a dip in April 2025. After completing its wave IV pullback, the stock reached new all-time highs in wave V. Currently, three new high swings indicate that the upward movement isn’t over yet. Walmart is now in the $111 to $120 target zone, which suggests that it’s wise to be cautious instead of chasing the rally. After wave ((III)), a larger pullback in wave ((IV)) is expected, creating a new chance to buy before the upward trend resumes. The bullish cycle for Walmart looks strong on a weekly basis, indicating that investors should look for buying opportunities during pullbacks. Timing is essential; using the Elliott Wave strategy can help set positions after corrections of 3, 7, or 11 swings. The proprietary Blue Box system aids in finding high-probability entry points for future trading success. As we look ahead to early January 2026, last year’s analysis has held up well, with Walmart reaching its $111 – $120 target zone by late 2025. The stock is now signaling a potential wave ((IV)) pullback, opening up new opportunities. Traders should shift focus from chasing upward movement to preparing for this corrective phase. With the stock withdrawing from its recent highs, traders should consider strategies that benefit from a brief halt or decline in price. Selling out-of-the-money call credit spreads could generate income, especially if a new immediate high seems unlikely. This fits with the expectation that wave ((III)) has likely wrapped up, marking the start of a consolidation or decline period. This technical viewpoint is backed by recent economic data from late 2025. The December retail sales report showed a slight 0.2% increase, missing expectations and indicating that consumer spending may be cooling after a strong year. This economic backdrop supports the forecast for a short-term pullback in consumer-focused stocks like Walmart. The expected pullback offers a strategic entry point, and selling cash-secured puts is a smart way to approach this. By selling puts at strike prices near expected support levels, possibly around $100 to $105, traders can collect premiums while waiting for the correction to stabilize. This approach aligns with the strategy of buying the dip after a clear corrective pattern forms. Historically, Walmart’s pullbacks have provided good entry points, such as the 15% correction seen in the second quarter of 2025. A similar decline from the recent peak would target around $102, making it an important level to watch. An increase in implied volatility during this dip would further enhance the appeal of premium-selling strategies.

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