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I was quite enamored for a while with O’Reilly Auto Parts (symbol ORLY) as a short. In that magenta-tinted area below, you can see a wonderful topping pattern. And, as it’s supposed to, the price fell tremendously. Then it climbed……..and climbed……..and climbed. And, frankly, violated its pattern so massively that I almost totally lost interest.

More recently, however, there’s been a smaller top (cyan tint), and I shorted this last week. So far, so good. ORLY’s past behavior makes me skeptical about how well this will go, but for the moment, it’s a pretty clean setup (and, as before, I remain stunned how a company that has hundreds of retail stores selling auto parts and cans of motor oil can be this highly-valued).

orly