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Strategies & Market Trends : John Pitera's Market Laboratory
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To: The Ox who wrote (19001)4/10/2017 5:33:58 PM
From: John Pitera2 Recommendations

Recommended By
Hawkmoon
roguedolphin

   of 33421
 
Yes the Auto Part stocks are good shorts AZO, ORLY is in a very bearish descending triangle.

These stocks are all going to have a sizable bear market.... what happens is these companies keep opening more stores and you end up with tremendous overcapacity where there are too many stores in the same geographic area.

great pick up.

Message 30204617

To: The Ox who wrote (17189)8/25/2015 7:22:12 PM
From: John P Read Replies (2) of 19002
HI OX, yes companies that get way overvalued and go into a serious market decline.... can just keep sliding.

SAM has taken out it's 2014 support at 202, 208 and 210 the 3 lows of 2014 and I could believe that the stock could work it's way all the way back to the 110-120 range over the coming Quarter.

the auto parts companies AAP, ORLY, and AZO all have had %500 plus runs the past 4 to 5 years.... I know the average age of the US auto fleet is 11.5 years, but the equity prices seem significantly overdone.

John


SAM's final move up is the danger of shorting stocks before they are fully and completely distributed which takes so much time.... time is the element of the market that everyone, including me has the most difficulty with........... SAM took a long time to get anywhere near 120... but we have been in a very strong bull market.

the auto parts stocks stopped going up in late 2015 and have been going through a prolonged distribution
period.

AAP had a really nice break to the downside in Oct of 2015......

You get the PLAY OF THE DAY AWARD

for mentioning these stocks as you have to have a very long game in terms of waiting for a loved sector to stop going up and then let the distribution take place.

Yahoo back in 2000 on an unadjusted basis got all the way up to 240 I believe... I knew a few people in it.
selling the top is not the easiest way to make money on the bear side as Yahoo went down and then had violent reaction rallies several times.....

one can argue that the easiest point of the short was in Sept -Oct of 2000..... ORLY is getting ready for that kind of move down I would venture... the others are similar



John
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