Advance Auto Parts stock is running into a bearish trendline
Advance Auto Parts, Inc. (NYSE:AAP) is up 0.3% to trade at $152.80 this afternoon, but don't expect that to last. The security just neared a historically bearish trendline on the charts, which could have shares adding to their 34.9% year-over-year deficit. Plus, the stock is running into overhead pressure at the $155 region, which rejected an early January rally.
The trendline in question is
Advance Auto Parts stock's 60-day moving average.
Per Schaeffer's Senior Quantitative Analyst Rocky White's latest study, AAP saw five similar signals over the last three years, and was lower one month later 60% of the time with a 7% drop on average. A comparable move from its current perch would place shares back below $143.
An unwinding of optimism among options traders could generate additional headwinds. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AAP's 50-day call/put volume ratio of 2.19 sits higher than 89% of annual readings, indicating long calls have been picked up at a much quicker-than-usual clip.