Looking at the technical picture of the AutoZone Inc. stock (NYSE: AZO) on our 4-hour chart, we can see that after reversing lower at the end of April, the share price continues to form lower highs, while trading below a short-term tentative downside resistance line taken from the high of April 27th. Although there is potential for the stock to drift further south, to get a bit more comfortable with that idea, we would prefer to wait for a break below the lowest point of April first, which is at 1948.58.
A drop below that hurdle would confirm a forthcoming lower low, possibly clearing the way for a move to the 1916.60 obstacle, or to the 1872.04 hurdle, marked by the low of March 18th, where a hold-up might occur. However, if the slide continues, the next target could be at 1849.09, which is the low of March 14th.
The RSI is pointing slightly to the downside, while sitting below 50. The MACD is flat and sits just slightly above the signal line but remains well below the zero mark. Overall, the two oscillators show negative price momentum, suggesting that further declines are possible.
Alternatively, a break of the aforementioned downside line could invite more buyers into the game, especially if the price rises above the current highest point of this week, at 2050.54. AZO may travel to the 2078.75 obstacle, or to the 2115.68 hurdle, marked by the inside swing low of April 25th. If the buying doesn’t stop there, the next target might be at 2161.35, which is the inside swing low of April 27th.
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