Advanced Auto Parts (AAP) has more than doubled in the past 12 months. With no signs of distribution (selling) AAP could drive higher in the months ahead. Let's check the charts and indicators for guidance.
In this daily bar chart of AAP, below, we can see a bullish golden cross of the 50-day and 200-day moving averages back in February. This buy signal was not all that far off the bottom and the subsequent rally has certainly been worthwhile. Prices are still above the rising 50-day and the bullish 200-day lines.
Volume does not look bullish but the On-Balance-Volume (OBV) line shows a nice rise the past year telling us that buyers of AAP have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has been in a take profits mode through September but the two moving averages that make up this indicator have begun to narrow and could cross to the upside soon. This would be a fresh go long signal.
In this weekly bar chart of AAP, below, we can see that prices are above the rising 40-week moving average line. Prices are testing some resistance from late 2016/early 2017 in the $170-$180 area. A rally to $180 should open the way to further gains.
The weekly OBV line has been on the rise since November and the MACD oscillator on this longer time frame is bullish.
In this weekly Point and Figure chart of AAP, below, we can see a longer-term price target of $219 being projected. A rally to $178 will be a fresh upside breakout.
Bottom line strategy: Aggressive traders could go long or add to longs in AAP at current levels risking below $150. $200 and $220 are my price targets. Add to longs on strength above $178.