Walmart (WMT) Options Signal Bullish Bias: Key Strike Levels and Trade Setups for Q4 2024

• Walmart’s options market shows a call-heavy bias, with 7,146 open interest at the $111 strike for Friday expiration.
• The stock’s 1.1% intraday gain aligns with a short-term bullish Kline pattern and a 63.4 RSI suggesting momentum.
• Institutional investors are buying shares amid AI-driven retail bets, but tariffs and liability claims pose near-term risks.

Here’s the core insight: WMT’s options activity and technicals point to a high-probability upside breakout, but traders should watch for profit-taking at key resistance levels. Let’s break down why this stock is primed for a move—and where to position for it.

Bullish Sentiment in the Options Market: Calls Outpace Puts at Key Strikes

The options chain tells a clear story: traders are leaning bullish. For Friday expiration, the $111 call (OI: 7,146) and $110 call (OI: 6,346) dominate open interest, while puts are concentrated at $106 (OI: 3,508) and $107 (OI: 2,601). This 0.8168 put/call ratio (for open interest) means calls outweigh puts by nearly 20%, a strong signal of market optimism.

But here’s the catch: heavy call OI at $111 suggests a potential price target. If WMT breaks above $108.65 (Bollinger Upper Band), it could trigger a cascade of call buyers at $111, creating a self-fulfilling prophecy. Conversely, the $106 put OI acts as a soft floor—any dip below $105.66 (intraday low) might see short-term buyers step in.

Block trading is quiet, so no whale moves to worry about. But the call-heavy setup implies a risk-reversal trade: if WMT rallies past $108.65, the $111 calls could see explosive volume.

News Flow: AI and Earnings Fuel Optimism, Tariffs Add Noise

Walmart’s partnership with OpenAI is the headline act. Integrating ChatGPT for shopping is a bold move, and the 3.7% intraday pop after the announcement shows investors are buying the AI narrative. This aligns with the call-heavy options data—traders are betting on a post-earnings pop.

But don’t ignore the negatives. Tariffs and a $450M liability hit are real headwinds. The $106.22 previous close already factors in some of this risk, but if tariffs escalate, the $103–$97 support zones (30D and 200D) could see selling pressure.

The good news? Earnings guidance above consensus ($0.58–$0.60) and institutional buying (18.6% YTD gain) suggest the stock has legs. Analysts like RBC and Telsey are still bullish, with price targets up to $118.

Actionable Trade Ideas: Calls for Friday, Stock for Next WeekFor Options Traders (Friday Expiration):

• Buy the $111 Call (OI: 7,146): If WMT closes above $108.65 by Friday, this strike could see a 20%+ move. Target: $112.
• Sell the $106 Put (OI: 3,508): A bearish hedge if you’re long the stock. Breakeven: $106.

For Stock Traders:

• Entry Near $103.17 (30D Support): If WMT holds this level, consider buying dips. Target: $112 (52-week high + 5%).
• Bearish Put Spread (Next Friday): Buy the $106 put (OI: 912) and sell the $103 put (OI: 1,540) for a defined-risk trade. Profit if WMT dips below $105.

Pro Tip: Watch the $108.65 Bollinger Upper Band. A break above it could trigger a short-covering rally.Volatility on the Horizon: Balancing Bullish Momentum and Macro Risks

WMT’s setup is textbook bullish: strong options flow, AI-driven news, and institutional backing. But don’t ignore the risks. Tariffs and liability claims could trigger a pullback to $103–$97.

Here’s the plan: Go long with the $111 call or stock near $103.17 if you’re confident in the AI narrative. For the cautious, a put spread at $106–$103 offers downside protection. Either way, this stock is in a high-probability setup—just keep an eye on the macro risks.

The next 72 hours will tell the story. If WMT holds $105.66 and closes above $108.65, the bulls take control. If it breaks below $103.17, the puts will get busy. Either way, the options market has already priced in a directional move—now it’s time to act.