RESEARCH NOTES

Wal-Mart Stores Inc. (WMT)

Wednesday, October 1, 2008, 10:01 AM ET

Bullish Factors: Bullish daily MACD, The stock is in the short-term upward trend, Strong bullish daily Stochastic Osсillator, Support at 50MA, Similar stocks or key components have formed bottoms; gained momentums; Forward P/E (15.5) < Trailing P/E (17.8), P/S (0.59); Program trading buy orders at 58.13 after Sep 23, Implied volatility (34.69%) > Historical volatility (28.28%), Unusually high option trading volumes for Nov 55-65 Calls/Puts; Stock reacted adequately on the latest positive news;
Bearish Factors: Resistance at 63.25, PEG (1.45), Neutral EPS revisions trend;

OUR RECOMMENDATION: STRONG BUY RECOMMENDED TRADING VEHICLE: Open Debit Call Spread: Buy to Open WMTKX WMT Nov 52.5 Call IV 36.8 Delta 0.85 Sell to Open WMTKY WMT Nov 57.5 Call IV 33.4 Delta 0.65 Debit 3.80 Position Net Delta .20 Max Gain 1.20 Max Risk 3.80 Target Credit 4.30 Click here or the detailed Research Note (in PDF format)