Advance Auto Parts' Charts Have Improved, and the Quants Agree

Shares of Advance Auto Parts (AAP) were upgraded Tuesday by TheStreet's Quant Ratings service. Let's review the charts and indicators for some potential price targets.

In this daily bar chart of AAP, below, I can see that prices have firmed since lows made in October. AAP is trading just below the declining 200-day moving average line. Prices are trading above the rising 50-day line. The trading volume has been more active since June.

The daily On-Balance-Volume (OBV) line is up slightly from a low in November. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line.  

In this weekly Japanese candlestick chart of AAP, below, I can see a long decline to a low in the $50 area. Prices have moved up towards the underside of the declining 40-week moving average line. The weekly OBV line shows the start of improvement since November. The MACD oscillator has been improving since July and is not all that far below the zero line now. 

In this daily Point and Figure chart of AAP, below, I can see that the software is projecting an upside price target in the $95 area. 

In this second Point and Figure chart of AAP, below, I used weekly price data and here the software is pointing to an $84 price target.

Bottom line strategy: Traders should wait for a pullback close to $60 before probing the long side of AAP. Risk to $57. 

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