Walmart Inc. (WMT) shares rose more than 2% on Monday after the company settled its long-running lawsuit with Michigan's retirement fund for $160 million and partnered with Blue Apron Holdings, Inc. (APRN) on its newly launched Jet City Grocery business. The lawsuit with the City of Pontiac General Employee's Retirement System accused Walmart of defrauding shareholders by covering up suspected bribes with an expansion in Mexico. The news of the lawsuit initially erased more than $10 billion from Walmart's market capitalization back in 2012. The $160 million settlement erases a lot of that concern.
Jet's new online grocery service will cater to New York City residents that opt to receive same-day or next-day deliveries. Under the new agreement, Blue Apron will be a priority partner with the launch by providing customers with an option to purchase its signature ready-to-cook meal kits. Blue Apron shares rose more than 15% in early trading.
From a technical standpoint, Walmart stock broke out from prior highs at around $100.00 during Monday's session, following a bullish run dating back to the beginning of the month. The relative strength index (RSI) is approaching overbought conditions at 70.60, but the moving average convergence divergence (MACD) remains in a positive upswing.
Traders should watch for some consolidation above the $100.00 level over the coming sessions given the overbought RSI reading. With the bullish MACD reading, the stock could resume its uptrend following a period of consolidation. If the stock breaks down from its new support, traders should watch for a move lower to the bottom trendline and 50-day moving average at about $95.00.
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.