AutoZone, Inc (AZO) reported an earnings and revenue beat Tuesday morning but the stock has struggled to stay in the plus column. Let's check out the charts and indicators.
In this daily bar chart of AZO, below, I can see that prices have posted only a modest gain over the past twelve months. Rallies have been followed by corrections several times. AZO now trades above the rising 50-day moving average line and above the rising 200-day line. The daily volume pattern does not show an increase in turnover the past year.
The daily On-Balance-Volume (OBV) line shows a decline into October and only a slight improvement subsequently. This is not a strong setup. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but correcting to the downside.
In this weekly Japanese candlestick chart of AZO, below, I can see an impressive upside advance. Prices trade above the rising 40-week moving average line. Unfortunately trading volume has not expanded on the advance. The weekly OBV line shows a decline from May. The MACD oscillator recently turned higher after a correction.
In this daily Point and Figure chart of AZO, below, I can see a price target in the $3,249 area. A trade at $2,800 is needed to refresh the uptrend.
In this weekly Point and Figure chart of AZO, below, I can see a price target of $3,349.
Bottom line strategy: When a stock (or commodity) does not rally on what appears to be bullish news it is a sign that the marketplace is looking ahead to bearish news.
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