• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Is It Time to Stock Up on Auto Supply Stores?

Let's look under the hood of AutoZone, Advance Auto Parts and O'Reilly Automotive.
By BRUCE KAMICH
Jun 23, 2022 | 10:34 AM EDT
Stocks quotes in this article: AAP, AZO, ORLY

A sell-side firm recently rated Advance Auto Parts (AAP) and AutoZone (AZO) new buys. Let's check under the hood of these two companies, as well as fellow auto supply company O'Reilly Automotive (ORLY) , to see if this is a good place to invest.

An Advance Look

In the daily bar chart of AAP, below, we can see that the shares declined from January to a recent low in June. AAP trades below the declining 50-day moving average line as well as the declining 200-day line.

The On-Balance-Volume (OBV) line has been stable since making a low in March. This is a positive sign. The 12-day price momentum study shows equal lows in May and June and this is a category of bullish divergences when compared to the weak price action.

 
In this daily Point and Figure chart of AAP, below, we can see a potential downside price target in the $138 area. A trade at $194 may be needed to improve this chart.
 

Get in the Zone?

In this daily bar chart of AZO, below, we can see that prices have been in an uptrend the past 12 months. The shares tested and temporarily broke the rising 200-day moving average line in May. Prices are now back above both the 50-day and the 200-day averages.
 
The daily On-Balance-Volume (OBV) line shows a fresh rise from early March as buyers of AZO have been more aggressive. The MACD oscillator is above the zero line.
 
 
In this daily Point and Figure chart of AZO, below, we can see that the software projects a downside target in the $1,781 area.
 
 

Oh, Oh, Oh O'Reilly

In the daily bar chart of ORLY, below, we can see that the shares were in an uptrend until a gap to the downside in late April. Prices broke below the 200-day average line and rallies so far to the underside of the line have failed.
 
The OBV line continues to point higher and is a bullish divergence when compared to the price action. The MACD oscillator shows improvement from May but is still below the zero line.
 
 
In this daily Point and Figure chart of ORLY, below, we can see an upside price target in the $664 area.
 
 

Bottom-Line Strategy

So we have three auto parts companies and two are recommended by a fundamental analyst. The charts of AAP and AZO are not particularly compelling, in my opinion. I prefer the long side of ORLY at this point in time. Risk below $560.
 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Automobile Components | Automotive | Retail | Analyst Actions

More from Stocks

A Few Thoughts on How to Approach a Tougher Bear Market Than Most

Bob Byrne
Jul 1, 2022 8:30 AM EDT

A key goal is to keep from losing money while the current bear runs its course, and don't count on positive seasonality leading to the Fourth of July.

Four Things I Know for Sure About the Market

James "Rev Shark" DePorre
Jul 1, 2022 8:06 AM EDT

As the second half of 2022 begins, keep this quarter of observations in mind.

Little-Known Akoya Biosciences Appears to Have Found a Bottom

Bruce Kamich
Jul 1, 2022 7:53 AM EDT

The stock of the life sciences company has found buying interest at a key support level.

Hong Kong Marks 25 Years Since Handover With New Version of History

Alex Frew McMillan
Jul 1, 2022 7:47 AM EDT

Just don't call it a handover - Chinese President Xi Jinping has been on a whistle-stop tour of Hong Kong, which we're now told never belonged to the British.

Welcome Break, Sellers at the Ready, Defense on Offense, GDP Sags, Yield Watch

Stephen Guilfoyle
Jul 1, 2022 7:20 AM EDT

Plus, disappointing personal spending figures and an explanation of how the Fed views inflation (hint: it isn't how you view it).

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:59 PM EDT PAUL PRICE

    Very good quarterly numbers from Bassett Furniture (BSET)

    Bassett Furniture (BSET) blew right through analys...
  • 04:41 PM EDT PAUL PRICE

    First Half Results - Putrid Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 marked...
  • 04:51 PM EDT PAUL PRICE

    We Should Be in for Better Starting Soon

    Window dressing Thursday, the last day of the...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login