AutoZone Stock Is Coiling Up | Technical Analysis
The AutoZone Inc (NYSE: AZO) is the largest retailer in the US, specialising in automotive parts and accessories. Yesterday, the company delivered 2020 Q4 results, where it managed to beat its initial forecasts. The company showed around 15% increase in sales. EPS went from $12.39 to $14.93. However, margins have declined slightly, and Covid-related costs increased. But despite that, the company is still showing good results. It seems that the pandemic could have caused more issues for the company’s operations, but online sales helped the company move forward. Consumer demand for AutoZone’s services was high, mainly due to the fact that most people have taken the option of fixing their vehicles, rather than going for a new one. This was mainly because of the uncertainty in their future employment. If this tendency remains, the company could stay under the radar of new investors.
The technical picture of AZO on our daily chart shows that it is currently trading between two short-term trendlines, a downside one, taken from the high of January 12th, and an upside one, drawn from the low of December 8th. As long as the share price stays in between those two lines, we will remain neutral.
If the stock goes ahead and breaks the aforementioned downside line and then rises above the 1199.50 barrier, marked by the high of February 25th, that may invite more new buyers into the game, potentially setting the stage for larger advances. AZO could easily travel to the 1220.50 hurdle, marked by the high of February 19th, where the stock might stall for a bit. That said, if the buying interest is still strong, this might result in a further move north, where the share price may test the 1237.30 obstacle, or even the 1250.00 level, marked by the high of January 21st.
The RSI is just fractionally above 50 and still points higher, showing rising upside price momentum. The MACD, despite being below zero, is now pointing higher, while running above its trigger line. The two oscillators are somewhat in support of the above-discussed scenario.
In order to examine a possible move towards some lower areas, a break of the previously-discussed upside line would be needed. In addition to that, a drop below the 1137.00 hurdle, marked by the low of February 16th, may strengthen that scenario. AZO could drift to the lowest point of January, at 1112.00, a break of which might set the stage for a push to the 1084 level, marked by the lowest point of December 2020.
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