Share price sold off on Friday morning, recovered to positive territory before closing lower at the bell. The market in general sold tech pretty heavy on Thurs/Fri.
Somewhat concerning is the close below the price fork (White line) That is the first time since the uptrend started we have EVER seen a retracement below the current level of the trading fork since PRTS started moving up in March.
The RSI also barely breached the support line. Also the first time this has been breached since early March.
On the weekly chart It's the first big red candle since the uptrend started.
The bottom wicks of the current bull pennant (hourly) look like the consolidation phase may be pushed out toward earning date.
Note that the SP did still close within the main channel (Green & Red line) so technically the trend is still intact. I am less concerned with a wick running outside the channel than if the close finishing outside.
The real telling thing for me here is volume. On the weekly level it was average to below average volume. Friday was well below average as well with less that half of the normal amount of shares traded. The bears seemed to lack follow through toward the lower range of price.
While I'm watching the action very carefully going into this week I am leaning toward that this was a normal pullback and NOT a key reversal moment.
Are there any fundamentals to explain its rise? Seems to be skyrocketing while falling short in earnings. Hmmmm
Kazparov
⋅
@StoneLuv, On the Q1 Earnings call they noted that " generate record net sales in Q1, continued strong margins and increased adjusted EBITDA. Our Q1 adjusted EBITDA was almost as much as we generated in all of fiscal year '19."
"In early April, when the stimulus checks began to arrive, we saw a significant increase, not only week over week, but year-over-year as well. We have historically seen a lift when consumers receive their tax refunds, and the stimulus checks were no exception. We had a record week in April with some of our top sales days in company history shortly after the stimulus checks were distributed. While we ultimately view this as a temporary benefit to our business, we're also starting to see other favorable tailwinds come out of this unprecedented time. As the nation adjusted to the new normal of shelter-in-place and social distancing, many of the consumers who previously shopped for auto parts at brick-and-mortar stores are now entering the e-commerce market for their auto parts needs.
There are also more first-time online auto parts shoppers as well as new DIY hobbyists, who now have more time on their hands to work on their vehicles at home. This evolution in consumer behavior has increased demand in the near term, and we will, of course, continue to monitor external factors in this new environment as we evaluate potential longer-term impacts to our business. We see a great opportunity when more cars return to the road and miles driven start to increase again. Miles driven are at current low, but we expect that number to eventually rebound and increase, especially given low gas prices, which have historically benefited our business.
In the first 5 weeks of Q2, even with miles driven down 50% across the nation, we still experienced significant growth as total sales were up more than 40% on a year-over-year basis, while maintaining solid gross margins. The increase overindexed to our e-commerce sites as they significantly outpaced the growth in marketplaces."
finance.yahoo.com/news/edited-transcript-prts-earnings-conference-083531592.html
So to answer your question yes but I'm not sure that the company is 6x - 7x worth it though.
This is a momentum trade fueled by high liquidity in the market. It's a high beta stock with big moves in both directions in a very clear channel. I see no need to hold it long term when you can pull out 15-30% trades on a short basis.
I feel that the stock gets a bit of a reset on Earnings but that is just my personal opinion
StoneLuv
⋅
@Kazparov, well said. Thank You. That’s the exact article I read after asking you. Makes more sense now.
StoneLuv
⋅
@StoneLuv, very oversold. Looks like a possible earnings play to me as well.
Kazparov
⋅
@StoneLuv, Yes and see my post from today. selling of HARD at the open.