Wal-Mart Looks Compelling In Current Market

In the last month alone, the S&P 500 has rallied over 6%. We have now broken out of the long-term trading range between 1,040 and 1,150 on the S&P. Skeptics abound, however, and it is really hard to go "all in" at this point with the major averages so stretched on a near-term basis. Furthermore, a good chunk of this rally is likely the result of market expectations for more quantitative easing from the Federal Reserve.



Some observers are estimating that the Fed may add $1 trillion in liquidity to the system by purchasing assets. While this may be a strong catalyst for stock prices, it seems like a tenuous one. What if the number is less than anticipated, or the Fed holds off on QE II? St. Louis Fed President James Bullard said this was a possibility on Friday.



Market participants that want to go long here should be looking for something that provides relative protection in case of a sharp snapback in stocks. For this reason, Wal-Mart Stores, Inc. (WMT) looks attractive. The chart is trending strongly upward, and WMT has gained more than 10% over the last three months, and around 5% in the last month. This is not too shabby for a low-beta, blue-chip name like Wal-Mart.

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Wal-Mart Looks Compelling In Current Market originally appeared on BloggingStocks on Mon, 11 Oct 2010 17:30:00 EST. Please see our terms for use of feeds.

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