AZO runs into sellers again around 1073.58
AutoZone Inc. (AZO) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
AZO finished the week -0.54% lower at 1053.21 after losing $13.34 (-1.25%) today on low volume, strongly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing below Thursday's low at 1057.69, AutoZone confirmed its breakout through the previous session low after trading up to $10.26 below it intraday.
Daily Candlestick Chart (AZO as at Feb 14, 2020):
Friday's trading range has been $26.15 (2.45%), that's above the last trading month's daily average range of $19.35. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AZO.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on January 31st, AZO lost -0.71% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 1047.43 earlier during the day, the stock bounced off the key technical support level at 1047.87 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move above 1071.85 in the prior session, the share ran into sellers again around the same price level today, failing to move higher than 1073.58.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 1042.92, downside momentum could accelerate should the market break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for AutoZone. Out of 139 times, AZO closed higher 59.71% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 60.43% with an average market move of 0.71%.