Shares of Walmart Inc. WMT looks like they are about to go up again. The stock seems to be breaking out.

Breakouts are usually a positive development in the financial markets, which is why our team of trading experts chose Walmart as our stock of the day.

Resistance is a large concentration of investors and traders trying to sell their stocks at or near the same price. When a stock rises and hits resistance, the rally usually ends or is paused. As you can see on the chart, there was resistance for Walmart at around $77.30.

A “breakout” occurs when a stock trades above a resistance level and holds there. Breakouts are usually a positive sign for a stock. They mean that the large group of traders and investors who created the resistance with their sell orders are out of the way.

They have either completed or cancelled their orders.

Also read: Walmart stock reflects its late 1990s boom. A recent 46% year-to-date rise reveals new highs and promises breakouts above $100

If a large portion of supply (sell orders) is removed from a market, it could set the stage for an uptrend. This means buyers will have to be aggressive in acquiring shares. They will have to pay higher prices to attract sellers to the market.

This action can force the stock into an uptrend.

A resistance level can persist for an extended period of time due to market psychology. Investors who bought stocks near that level may feel like they made a mistake if the price reverses and the stock is sold, leading to buyer’s remorse.

Many of these disappointed investors and traders decide to sell their positions if they can get out of them without losses. Then, when the stock rises back to their purchase price, they try to sell.

If investors have the opportunity to sell their shares at the same price they originally bought them at, they can close their positions at breakeven. If enough sell orders are placed at this level, resistance is created, preventing the stock from rising.

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