The shares rose 21% from Oct. 15 to an intraday high of $593 last week. A year ago, the stock rose 23% from Dec. 9 to Feb. 12 after the company reported better-than-expected earnings. This time around, analysts estimate the company will report earnings of $7.17 per share.
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With all of that in mind, here's how to trade AutoZone, which includes exit strategies given the stock's momentum.
Investors in AutoZone ($587.95) should book profits by entering a good 'til canceled limit order to sell on strength at a key technical level of $602.45 and employ a sell-stop below another key technical level at $562.20. If you are looking to buy AutoZone on weakness, enter a good 'til canceled limit order to buy at a key technical level of $450.70.
Here's the daily chart for AutoZone.
Courtesy of MetaStock Xenith
The daily chart for AutoZone shows that the 2013 momentum run-up began when the stock broke out above its 200-day simple moving average (green line) at $370.76 on Feb. 7, 2013. The stock stayed above its 200-day SMA until trading below it between Sept. 22 and Oct. 24 with the 200-day SMA now at $533.34. The latest momentum run-up is shown from the low of $491.93 on Oct. 15 to $593 last Wednesday. It could be tough for the stock to sustain gains following that gain.
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