CARG snaps to lowest close ever
CarGurus Inc. (CARG) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CARG ended the week -24.87% lower at 25.05 after tanking $9.05 (-26.54%) today on high volume, notably underperforming the S&P 500 (0.18%) following Thursday's earnings report. This is the biggest single-day loss ever recorded for the stock. Today's close at 25.05 marks the lowest recorded closing price ever. Trading $0.61 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (CARG as at Feb 14, 2020):
CARG reported earnings of $0.17 per share after Thursday's market close. With analysts having expected an EPS of $0.14, CarGurus Inc. topped market expectations by 21.4%. The company's last earnings report was released on Nov. 5, 2019, when CarGurus Inc. reported earnings of $0.14 per share beating market expectations by 40.0%.
Friday's trading range has been $1.69 (6.53%), that's far above the last trading month's daily average range of $1.15. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for CARG.
Crossing below the lower Bollinger Band for the first time since Monday, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 34.90 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on February 7th, CARG lost -2.76% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week Low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CarGurus. Out of 6 times, CARG closed higher 83.33% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 50.00% with an average market move of 3.08%.