Hello, stock market fans from around the planet. How have the last few weeks of your trading been going? Exceptionally wild, I imagine. Some gargantuan swings and percentage moves across many stocks and sectors since the start of 2016. A lot of analysts are calling for a recession.
With the decreased cost of gas and oil, it’s likely that people will be driving more and therefore repairing their vehicles more. Many analysts are quite bullish on the auto retail sector. I personally am not. I think they are and have been in a bubble. Only time will tell, but ORLY is coming into a very strong ‘do or die’ price point and pivot location. AZO, too, has been wavering weakly lately.
Here are my thoughts and chart on ORLY. $225 is a very strong support / pivot price on ORLY. As of 2/4/16 when I was reviewing ORLY last, I think officially ORLY has created a lower high on a primary level. 2/2/16 created a one black crow on ORLY and almost a tweezer top, definitely showing some weakness. With earnings coming up in a few days, if ORLY gaps down and opens below $225 I won’t be bullish. At all. That would likely form a huge H&S pattern with $225 being the neckline. The 100 SMA is at $202.40 and if ORLY gaps down on earnings I think the 100 SMA is a nice target for the bearish move.
Now, of course, ORLY could gap up on earnings. I would be more bullish to neutral with a gap up, considering this recent move a distribution phase. Otherwise, I am still very cautious on any buying up here in quite extended levels on the bigger picture for both ORLY and AZO.