"It operates 3,277 stores in 28 states, serving both do-it-yourself customers and professional installers. Auto parts stocks could benefit from the slowdown in the economy due to a contraction in new car sales. People may keep their cars and fix them up. Thus, they will need auto parts.

"The stock recently jumped to $32.74 after the company reported better than expected earnings; this pushed the stock out from a nine-week base. It is now within range to overcome its all-time high at $38.84.

"ORLY reported fourth quarter net of 32 cents a share, down from 35 cents a year ago. However, it was better than the 30 cents a share expected by the Street.

"The stock has been doing well, appreciating 18% the past 12 months. That compares with a 40% drop in the S&P 500 index. Technically, the stock has been in an intermediate-term consolidation. However, near term it is on the move again.

"The stock's technicals are very good. The momentum indicator is bullish and the accumulation - distribution line has broken out to a new peak. Institutional sponsorship is excellent. The largest fund holder is 4-star rated American Funds AMCAP with a big 5.4% stake. It was a recent buyer of 459,000 share.

"We are targeting the stock for a move to 40. A key will be for the stock to follow through. Our caution is due to the weakness in the general stock market.

"Autozone is the largest specialty retailer of automotive parts and accessories to do-it-yourself individuals and professional installers, with annual revenues of $6.5 billion.

"AZO has 4,092 stores in the U.S. and 148 in Mexico. The company operates its commercial program out of 2,236 of its stores, offering delivery of parts to local, regional, and national repair garages, dealers, and service stations.

"The stock's long-term chart is impressive. It has soared from 28 in 2001 to its peak of 146. It is now breaking out from a long-term basing formation. We see the stock breaking out from its near-term flat base and longer 'W' or double-bottom base.

"A push to a new high could well attract more buying. However, AZO's earnings outlook is not that robust. Net for the fiscal second quarter just ended February 28 should rise 10% to $1.84 a share from $1.67 a year ago. The highest estimate on the Street is at $1.91 a share.

"Net for the fiscal year ending August 30 should increase 8% to $10.87 from $10.04 a year ago. The stock sells with a price-earnings ratio of 13 which is reasonable considering the earnings growth rate. Looking out to fiscal 2010. the Street is forecasting a 10% gain in net to $11.96 a share.

"Its accumulation - distribution line is strongly bullish. The strong advance/decline line indicates there is good buying taking place in the stock. The high price of the issue gives the look of a possible stock split. That would be bullish.

"Institutinal sponsorship is very good. A large holder is 4-star rated Fidelity Low-Priced Stock Fund with a 1.7% stake. A key buyer was 4-star rated Brandywine Blue Fund which picked up 483,000 shares.

"We suggest scaling into the stock due to the bearish general stock market. We see AZO as more of a trading play and are targeting the stock for a move to 175."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.