AZO closes above its opening price after recovering from early selling pressure
AutoZone Inc. (AZO) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, AZO ended the month -1.72% lower at 1128.12 after edging higher $0.20 (0.02%) today on low volume, notably underperforming the S&P 500 (1.54%). Trading up to $16.52 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (AZO as at Jun 30, 2020):
Tuesday's trading range has been $23.80 (2.11%), that's below the last trading month's daily average range of $28.71. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AZO.
Two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji.
After trading down to 1111.58 earlier during the day, the market bounced off the key technical support level at 1124.08 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on May 27th, AZO actually lost -1.45% on the following trading day.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 1149.17 where further buy stops might get triggered. As prices are trading close to June's high at 1165.05, upside momentum could speed up should AutoZone mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for AutoZone. Out of 84 times, AZO closed higher 63.10% 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 57.14% with an average market move of 1.29%.