NOTES ON WAL-MART (WMT)
Protective Put

1. In mid-November 2003, Walmart opens down $1.50 to $56.25 and
proceeds to trade down from there breaking the lower end of an
uptrend channel.

2. Wal-mart then has a quick consolidation in mid-November
around the $54.50- $55.00 level followed by a small technical
rebound back to around $56.25. This may have been due to some
investors thinking that the consolidation was a bottoming and
thus a buying opportunity.

As it turned out, it was a false bottom and the stock traded
back down rapidly to lower lows. A purchase at that level
probably led to losses.

3. In early December, Walmart starts another consolidation
around the $52.50 level. It seems to be another buying
opportunity for bottom fishers. There has already been one false
bottom that has cost someone a lot of money. If that investor
employed a protective put, the loss would have been limited and
they may have been able to purchase again at this level if they
wished.

4. The $52.50 level turns out to be another false bottom and the
stock trades down another $2.00 to $50.50. Here again, the same
opportunity exists. Is this the bottom? If it is, a nice profit
can be made quickly. If not, losses can mount quickly as another
false bottom occurs and the stock trades down rapidly. This
level, so far, turns out to be a good buying opportunity as the
stock rebounds back up to $52.50 quickly.

Conclusion: Bottom fishing can be a very risky endeavor;
however, an investor can not ignore the potential reward that
comes with the risk. If the risk can be minimized without
affecting the potential reward to a significantdegree, the
risk/reward scenario will be an advantageous one for a potential
investment.

The protective put will accomplish this perfectly. In a case
like this, the protective put strategy should be employed at any
level where the investor deems it worthy of a capital
commitment.