Don't Ignore This Chart!

Autozone Gets Back in Gear


Autozone (AZO) is a leading stock because it recorded a 52-week high in December and remains above the rising 200-day SMA. The S&P 500, on the other hand, recorded a 52-week low in December and remains below its 200-day SMA.

The chart below shows AZO with a falling wedge correction over the last six weeks. Even though this correction occurred when the S&P 500 moved higher, I still view it as a pullback within a bigger uptrend. The falling wedge is typical for a pullback within a bigger uptrend and the decline retraced around 50% of the prior advance. Think two steps forward and one step backward. Also notice that AZO is finding support near the prior breakout zone (780-800). As such, I would expect an upside breakout and continuation at some point.  

The indicator window shows the Commodity Channel Index (CCI), which is a momentum oscillator. A move below -100 points to oversold conditions and a move below -200 points to serious oversold conditions. CCI dipped below -100 twice this year and moved back above with Tuesday's bounce. The green lines show when CCI turned up in the past.

On Trend on YouTube

Monitoring Precarious Cross Currents

  • Short-term Breadth Indicators Holding Up
  • A Battle Royal Between Two SMAs
  • Going Nowhere with 4 Gaps in 6 Days
  • Key Supports for Sector and Industry ETFs
  • Bonds, Dollar, Gold and Oil
  • Click here to Watch

- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus