AZO pushes through Thursday's high
AutoZone Inc. (AZO) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
AZO finished the week 4.46% higher at 1122.94 after gaining $18.47 (1.67%) today, strongly outperforming the S&P 500 (0.24%) ahead of Tuesday's earnings report. Today's close at 1122.94 marks the highest recorded closing price since March 10th. Trading up to $16.83 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 1113.25, the stock confirmed its breakout through the previous session high after trading up to $11.69 above it intraday.
Daily Candlestick Chart (AZO as at May 22, 2020):
AZO is set to report earnings on Tuesday. For the upcoming report, analysts expect the company to have earned $13.81 per share. The company's last earnings report was released on March 3, 2020, when AutoZone Inc. reported earnings of $12.39 per share topping market expectations by 4.2%.
Friday's trading range has been $35.08 (3.17%), that's slightly above the last trading month's daily average range of $32.81. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower 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 bullish Outside Bar. The last time this happened on May 14th, AZO gained 1.84% on the following trading day.
Unable to break through the key technical resistance level at 1124.08 (R1), AutoZone closed below it after spiking up to 1124.94 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 1094.76 in the prior session, the market found buyers again around the same price level today at 1089.86.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 1142.99 where further buy stops might get activated. With prices trading close to this year's high at 1197.58, upside momentum could accelerate should AZO be able to break out to new highs for the year. Trading close to March's high at 1166.21 we might see further upside momentum if potential buy stops at the level get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for AutoZone. Out of 480 times, AZO closed higher 54.17% 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 63.54% with an average market move of 0.94%.