Only 10% (or about 50) of the S & P 500’s holdings advanced on Tuesday’s market-wide sell-off, which is an extremely low amount. Two of these were Autozone (AZO) and O’Reilly Automotive (ORLY) . Being up on a very big down session isn’t the only thing that the stocks have in common. They both are automotive companies, and both are priced over $1,000 share. In fact, they are two of just 10 S & P 500 holdings currently trading over the $1L mark. The reason we’re writing about them is that they are in distinct uptrends across various time frames. However, since they are not Mag 7-related and aren’t in an industry typically thought of as high-tech, they don’t get a lot of attention. We’re giving them some attention today. Don’t be scared by high stock prices Before we get into the charts, we first must come to grips with their sky-high prices. AZO is trading around 2,730 vs. 1,050 for ORLY. AZO has had two stock splits in its history vs. three for ORLY. AZO’s last split was in 1994… 30 years ago. ORLY’s last split was in 2005… almost 20 years ago. Here’s why we like AZO and ORLY: 1. Both stocks routinely have traded above their respective upward sloping moving averages. There have been occasions when they have undercut the line over the last few years, but other than during COVID, the time spent under the long-term average has been minimal. This shows underlying demand even after selloffs, which is how uptrends persist. 2. Consistently strong weekly momentum This is evident on the weekly charts, too. Notice how the 14-week RSI (a measure of momentum) has oscillated between the overbought threshold and the mid-point since 2018 for both. Not many stocks have been this consistent over this time frame. 3. Multi-decade uptrends Here are 25-year charts of both stocks. While there have been periods when they’ve struggled for multiple months (most recently in 2017), the very long-term trends have not been violated. 4. Primed to outperform the market again All that said, AZO and ORLY have not outperformed the S & P 500 over the last two years. But their recent relative lines vs. the SPX now resemble the patterns from 2019-21, right before strong relative moves commenced. While past performance doesn’t guarantee anything for the future, knowing AZO and ORLY’s history, they could be ready to breakout on a relative basis again soon. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
