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.