Walmart Prepares to Break Out Ahead of Earnings

Walmart's (NASDAQ: WMT) trading activity has been quiet on Wednesday ahead of its earnings release tomorrow. The company could be setting up for a rally, as seen in some price action patterns before earnings announcements.

According to Benzinga, when a company reports strong earnings, the stock sometimes drops because everyone who wants to buy it beforehand does so after the news is released. When the earnings are announced, there's no one left to buy, leading to a market with no buyers and a downward trend.

Walmart is currently testing a resistance level at $117, which could indicate a potential breakout if buyers overpower sellers. A breakout would be a bullish dynamic, allowing the price to move higher as buyers are forced to outbid each other.