AAP rises after beating first quarter profit estimates

Turnover, meanwhile, is in line with forecasts

Advanced Auto Parts, Inc. (NYSE: AAP) entered the earnings confessional this morning, reporting first quarter profit of $ 3.34 per share, which beat Wall Street forecasts as its $ 3.33 billion in revenue was in line with estimates. In addition, same-store sales for the quarter increased slightly more than expected, after the auto parts supplier experienced strong sales growth from both DIY and professional customers. In response, the AAP is slightly higher, last seen up 1.2% to trade at $ 196.88 in ecommerce.

On the charts, the AAP has fallen since reaching an all-time high of $ 210.18 on May 10. Now working towards that all-time high, thanks to a rebound from its 70-day moving average, the advanced auto parts inventory is set to reverse its 40-day moving average for the first time in six sessions. Since the beginning of the year, the title is up 23.6%.

A short squeeze could fuel even more tailwinds for AAP stocks. Although short interest fell 11.6% in the most recent reporting period, the 3.23 million shares sold short still represent 5% of the stock’s available free float, or nearly four days of repressed purchasing power. Simply put, a further decline in pessimism among short sellers could push advanced auto parts inventory even higher.

An unwinding of pessimism in the options wells could keep the wind in its sails. This is the AAP Schaeffer’s open put / call (EVEN) interest ratio of 1.24, which is higher than all figures from last year except 2%. In other words, short term options traders have rarely been more put oriented.

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