There’s an old saying on Wall Street that “gaps refill.” If it’s true, there’s a good chance that the sell-off in Walmart Inc. (NYSE:WMT) is about to end.
Between the close on Oct. 18 and the open on Oct. 19, shares gapped up from $141.68 to $144.63. This shows up as a blank space (or a gap) on a chart.
After a rally, Walmart has reversed and it’s now trading back down in the range that it gapped up through. Because the stock spent no time trading in this range on the way up, there will be a low amount of vested interest in it in between these price levels.
This means there may not be a sufficient number of buyers to hold the shares higher. They could fall back through the range. The gap will have refilled.
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Photo: Walmart via Flickr