Believe it or not, AutoZone (AZO, $135.68, down $3.52) has been testing its 52-week high in recent days and has been unsuccesful in its bid to take out $143. Today’s decline should be watched closely if the stock is unable to rebound.

We were recently successful in an AutoZone put option trade on November 19 when shares were at $100. We rode the stock all the way down to $85 a few days later. The December 75 puts went from $1.80 to over $6.00 and we got out when the stock started to rebound.

Since then, the stock has added 50 points. I’m not convinced the stock has the strength to make it to new highs and I’m looking at the February 115 puts (AZONC, $3.00, up $0.70) as a possible short-term play. I like positions here with a stop of $2.00 and an exit target of $4.00.

Rick Rouse