On Friday night's Mad Money program, Jim Cramer said in his game plan for this week that he was also a fan of AutoZone (AZO) . The company is due to report its latest quarterly numbers this coming Friday.
We looked at the charts of this auto supply company back on May 29, when we wrote that "Shares of AZO are pointed up and traders should operate from the long side risking a close below $1,050 for now. The $1,380 area is our price objective." Prices have edged down towards our stop loss point so a fresh look at AZO seems like a good idea.
In this daily bar chart of AZO, below, we can see that prices are testing the bottoming 200-day moving average line. AZO remains above the rising 50-day moving average line.
The daily trading volume has remained active and the On-Balance-Volume (OBV) line still shows gains from its late February low.
The strength of the uptrend has weakened with the Moving Average Convergence Divergence (MACD) oscillator crossing to the downside and a take profits sell signal.
In this weekly bar chart of AZO, below, we can see a positive looking chart. Prices are above the flat 40-week moving average line with prices in a position to challenge the highs from December.
The weekly OBV line has improved from March and a close look shows that it has made a new high for the move up. A strong OBV line confirms the uptrend and can be foreshadowing further gains in the weeks ahead.
The MACD oscillator crossed to the upside last month for a cover shorts buy signal and this indicator is now close to crossing the zero line for an outright buy signal.
In this Point and Figure chart of AZO, below, we used daily price data and the chart is suggesting a possible or potential downside price target in the $994 area.
In this second Point and Figure chart of AZO, below, we used weekly price data. Here the chart gives us a potential upside price target of $1,546 but we need to see a trade at $1,183.83 to refresh the uptrend.
Bottom line strategy: Stay long and continue to keep stop protection "a close below $1,050". Strength above $1,184 will refresh the uptrend.
