A Chart a Day #18: Auto Zone Clunked

AZO is a stock that I've been bearish on this year, and more or less rightly so. Today AZO made a new six month low on continued selling which I assume most would attribute to the cash for clunkers program, also known as the "don't fix your pos (piece of shit) car, buy a new pos car" program. Today's break brings into play a long term pivot for AZO at about $140 which is where I'd expect the bulls to put up a real fight. If you are bullish on AZO that's where I'd try a low risk entry, if you are bearish then I'd wait for that level to break on volume. If $140 breaks then this "consolidation" in AZO could rapidly turn into "oh no the momentum died in my over bloated retail stock" crash. This chart is beginning to look a lot like this oldie, but goody:

BIDU and AZO

Two quick charts tonight. First BIDU, its still got that beautiful up trending channel and now sports a golden cross to boot. I think this is a low risk place to go long BIDU at the lower end of the channel, if BIDU drops further, lets say below $230 (which is max pain btw), then I would expect it to swiftly drop to $200. And as I mentioned previously, a break of $200 puts BIDU in hardcore bear mode.

AZO, on the other hand, looks like a building rug pull. A bearish delight, if you will. After making a new all time high at $169.99 two weeks ago on no volume, it reversed and has been selling on increasing volume since. It broke it's 50 dma, retraced and failed to retake it. I think this one heads down to fill that gap at $140 rather swiftly. After that, we'll see. That 200 dma looks pretty flat to me.

Disclosure: I bought some BIDU hail mary calls today at the close, and I own some further out AZO puts

IBD 100 stocks that are looking kinda toppy..

This is something I used to try a few years back for mixed results. Tonight I did a quick scan of the IBD 100 for stocks that are up a lot but showing signs of weakness. The ones that jumped out at me with decent options liquidity are:

STAR, LFT, ESI, LINC, SXCI, ALGT, APOL, PZZA, AZO, DLTR, AAP, FDO, AIPC, MYGN

Many of those are stocks that have been counter trending and are in defensive sectors so its not surprising that they would show weakness as the broader market has rallied lately. Some of them have pretty nice failed breakouts, LFT and AIPC for example. There were other IBD 100 that looked more bullish like BWLD, ARO, V and MFE but I'm not looking for longs right now.

Saturday Rock Blog: Fire on the Auto Zone Mountain

I found this clip in an article by Todd Harrison over at Minyanville, he seems to also enjoy mixing great music with financial musings. While he wasn't talking about AZO the video made me think of this top heavy stock because it dropped from an all time high on a surge in volume. That's the classic sign of a reversal. I don't want to make a big fundamental argument for or against AZO but I will say I don't buy the story. Also, as a counter trending stock I feel comfortable being short it in a market that's rallying. Anyways, here's the fire:


And here's the mountain:


Disclosure: I own AZO puts.