DailyPlay – Opening Trade (WMT) & Closing Trade (GOOGL) – May 6, 2025

Closing Trade

• GOOGL – 51% gain: Sell to Close 4 Contracts (or 100% of your Contracts) May 16 $150/$165 Call Vertical Spreads @ $11.83 Credit. DailyPlay Portfolio:  By Closing all 4 Contracts, we will receive $4,732. We initially opened these 4 Contracts on April 23 @ $7.80 Debit. Our gain, therefore, is $1,612.

WMT Bearish Opening Trade Signal

Investment Rationale

Walmart (WMT) presents a compelling short opportunity heading into its May 15 earnings report, with valuation extended and sentiment overly optimistic after a strong recovery rally. The stock has become a market favorite for its perceived defensive positioning amid macro uncertainty, but expectations now look disconnected from potential risks. Elevated consumer stress, margin pressure, and high FY25 guidance assumptions set the stage for disappointment. With WMT trading near all-time highs, even a modest guidance miss could trigger a meaningful pullback.

WMT has stalled below the $100 level after a persistent rally off its March lows, with the stock now pushing into overbought territory across both daily and weekly charts. Momentum is fading, as seen in a developing bearish RSI divergence, and price action is losing steam. Long-term resistance near $105 remains intact, while a post-earnings break below $95–$96 could open the door to accelerated downside toward the $70 zone, a prior support area and measured move target.

 Walmart’s valuation is notably rich compared to peers, despite relatively modest growth metrics and thin margins. The market is pricing in flawless execution at a time when consumers are stretched and cost pressures remain high. Any stumble in FY25 guidance could force a sharp re-rating.

• Forward PE Ratio: 37.78x vs. Industry Median 16.95x
• Expected EPS Growth: 9.75% vs. Industry Median 9.63%
• Expected Revenue Growth: 4.23% vs. Industry Median 4.98%
• Net Margins: 2.85% vs. Industry Median 2.40%

Sell the WMT Jun 20, 2025 $100/$105 Call Vertical for a net credit. This bearish call spread profits if WMT stays below $100, aligning with the thesis that the stock may stall or fade post-earnings.

WMT – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 7 WMT June 20 $100/$105 Call Vertical Spreads @ $2.10 Credit per Contract.

Total Risk: This trade has a max risk of $2,030 (7 Contracts x $290) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $290 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on an instrument that is expected to continue lower over the duration of this trade, off recent resistance.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 106

Stop Loss: @ $4.20 (100% loss to value of premium)

View WMT Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View WMT Trade