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The last two times Walmart shares did this the stock saw a huge rally


A first-quarter beat was not enough for Walmart's stock to bounce. One trader sees positive signs in its technicals that could bring about a rebound instead.

"Walmart is at a critical spot," said Frank Cappelleri, senior equity trader at Instinet, on CNBC's "Trading Nation" on Wednesday.

Shares of the world's largest retailer have seen a four-month rate of change of nearly negative 20 percent, he points out. That kind of decline is one so rare it's only happened twice in the past 10 years – once in 2009 and again in 2015.

"The positive is that this led to bounces every time," said Cappelleri.

Even as it has seen a sharp decline, its technicals still suggest some strength, Cappelleri added.

"Walmart is now getting close to a very impressive support line -- $80, $82, it's been able to bounce there over the last week or so and, coincidentally, we're also near an uptrending support line – again near that 2015 low," he said. "We like to have two areas of support together when we can as opposed to one. So, I think all those factors together could help Walmart bounce."

Walmart's stock has not broken below $80 a share since October of last year. It did hit a year-to-date low of $81.95 a share last Friday, but has since recovered to trade in Thursday's session at just under $85.

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