NEW YORK (TheStreet) -- Last Monday, we recommended a bullish options trade on AutoZone (AZO) - Get Report ahead of the company's earnings report. The recommendation was to sell an October 720 put at 17.41 (net of transaction costs). Well, the stock closed Friday at $753.48, up 28.49 points on the week.

What next, though? Let's let look at the chart as of Friday's close.

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Three bullish signals are found. First, the flip from to support from resistance was holding strong. After a flip, the new trading range tends to be stronger than average, so it definitely looks like AutoZone's new support is at about $720 and on the rise. Second, the morning star that formed during the first week of September turned out to accurately predict the bullish move. Third, the moving average convergence divergence has been in bullish territory since late July when the current rally began. As long as both moving averages remain above the signal line, this trend should be expected to hold.

So an aggressive strategy would be to close the October 720 put and take profits, and then open a new position. As of Friday's close, the 720 put could be bought to close at 580; when transaction costs are added, that cost comes out to $589, a net profit of $1,152. This could be replaced with an October 750 put at $1,340, or $1,331 after costs.

An more prudent course would be to hold onto the short position in the the October 720 put. It still has $580 of premium value, and this is likely to expire worthless. If the underlying price begins to decline, however, it would make sense to buy the put to close your short position and take profits. The chart does look bullish, but not bullish enough to extend the short put position to a higher strike. Given the current level of premium value, it is likely to revert into profits by the October expiration.

The case of AutoZone is a good example of how conservative options trades can be well timed based on a combination of earnings and chart reading. Letting the 720 put remain open may result in a profit of $1,741 in about one month.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.