Walmart Skyrockets 4.12%—Is This a Rebound or a Breakout?

Summary
• Walmart (WMT) surges 4.12% intraday, trading at $103.405 near its 52-week high of $105.30
• UBS and Bernstein raise price targets to $110–$113, citing margin expansion and retail resilience
• Costco (COST) also gains 2.74%, leading the Discount Stores sector’s outperformance

Walmart’s 4.12% intraday rally has ignited a firestorm in the retail sector, with the stock trading at its highest level since early 2025. Analysts from UBS to Bernstein are reiterating bullish stances, while the Discount Stores sector outperforms the S&P 500. With the stock nearing its 52-week high and strategic moves like the Vizio acquisition in play, the question is no longer if Walmart can sustain this momentum—but how investors should position for the next phase.

UBS Bullish Outlook and Strategic Moves Ignite Rally
Walmart’s sharp intraday gain is driven by a confluence of analyst upgrades and strategic momentum. UBS upgraded its rating to Buy with a $110 price target, emphasizing the retailer’s margin expansion potential and consistent earnings visibility. Bernstein and SocGen also raised targets to $113 and $105, respectively, while Erste Group upgraded the stock. Meanwhile, Walmart’s strategic initiatives—such as transforming Vizio into a private-label brand and expanding its sports partnership with Major League Soccer—signal long-term value creation. The stock’s performance aligns with its 52-week high, suggesting a re-rating as investors price in future margin gains and e-commerce resilience.

Discount Stores Sector Outperforms Broader Market
The Discount Stores sector, led by Walmart and Costco, has outperformed the S&P 500 year-to-date. Costco (COST) surged 2.74% intraday, while Walmart’s 4.12% gain underscores its dominance. The sector’s 10.42% YTD return contrasts with the S&P 500’s 7.43%, driven by strong back-to-school demand and cost-conscious consumer behavior. Walmart’s 4.2% enterprise operating margin expansion potential, compared to its 2010 peak of 6.1%, further differentiates it from peers like Target (TGT), which struggles with a -21.50% YTD return.

Options and ETFs to Capitalize on Walmart’s Momentum
• MACD: 0.64 (bullish), Signal Line: 0.27, Histogram: 0.37 (positive divergence)
• RSI: 80.86 (overbought), 200-day MA: 93.14 (well above), Bollinger Upper Band: 99.77 (price at 103.36, above band)

Walmart’s technicals suggest a continuation of its bullish trend. Key levels to watch include the 200-day MA at $93.14 and the 52-week high at $105.30. A break above $103.48 (intraday high) could trigger a test of $105.30, with the RSI near overbought territory indicating potential for a pullback. However, strong options volume and implied volatility suggest sustained demand for bullish exposure.

Top Options Picks:
• WMT20250815C105 (Call, $105 strike, 2025-08-15):
- IV: 19.62% (moderate), Leverage Ratio: 139.78% (high), Delta: 0.3379 (moderate sensitivity), Theta: -0.1746 (rapid time decay), Gamma: 0.1088 (high sensitivity to price swings), Turnover: 502,542 (liquid).
- This contract offers explosive upside if Walmart closes above $105 by expiration. A 5% price move to $108.53 would yield a payoff of $3.53 per contract, leveraging the high gamma and leverage ratio.
• WMT20250815C103 (Call, $103 strike, 2025-08-15):
- IV: 19.07% (moderate), Leverage Ratio: 65.47% (high), Delta: 0.5706 (strong directional bias), Theta: -0.2538 (aggressive time decay), Gamma: 0.1203 (high responsiveness), Turnover: 274,958 (liquid).
- Ideal for a mid-term rally, this option balances delta and gamma for a 5% move to $108.53, generating a $5.53 payoff. Its moderate IV and high leverage make it a core holding for aggressive bulls.

Actionable Insight: Aggressive bulls should prioritize WMT20250815C105 for a high-leverage, high-gamma play on a potential breakout above $105. Conservative traders may use WMT20250815C103 as a core position, hedging with a stop below $100.50.

Backtest Walmart Stock Performance
The backtest of Walmart (WMT) after a 4% intraday surge indicates positive short-to-medium-term gains. The 3-Day win rate is 57.23%, the 10-Day win rate is 61.28%, and the 30-Day win rate is 65.94%, suggesting that WMT tends to perform well in the immediate aftermath of such events. The maximum return observed was 4.01% over 30 days, which implies that there is potential for continued positive movement in the stock following a strong intraday gain.

Act Now Before Earnings Catalyst
Walmart’s 4.12% surge reflects a perfect storm of analyst upgrades, strategic momentum, and sector strength. With Costco (COST) surging 2.74% as a sector leader and Walmart’s options chain showing high liquidity and leverage, the stock is primed for a continuation of its bullish trend. Investors should monitor the 200-day MA at $93.14 as a critical support level and the 52-week high at $105.30 as a key resistance. A breakout above $103.48 could trigger a retest of $105.30, while a pullback below $100.50 may invite short-term volatility. Act now: Position in high-gamma calls like WMT20250815C105 and watch for a post-earnings catalyst on August 21.