boisterousbob

AutoZone Is Headed for a Near-Term Breakdown: Time to Short

Well this stock has had a heck of a run up.

My view is that if we go into a sustained rally money will come out of this stock because (1) there will be lots of opportunities elsewhere and (2) the premise of this stock is that everything else is week.

If we go sideways in the overall market, this stock is still looking overbought short term.

For a short term play (disclosure) I am short April 165 Calls and Long April 170 Calls as a hedge.

Rather than shorting the stock outright this trade (currently paying about $2.25) is a bet that AZO will not continue it's breathtaking pace up for the next few weeks, and will instead go up slowly, or go sideways, or go down.