CARG still stuck within tight trading range
CarGurus Inc. (CARG) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CARG ended the week 1.71% higher at 26.75 after losing $0.36 (-1.33%) today, notably underperforming the S&P 500 (1.05%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CARG as at Jul 10, 2020):
Friday's trading range has been $1.17 (4.3%), that's slightly above the last trading month's daily average range of $1.17. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CARG. Prices continued to consolidate within a tight trading range between 26.08 and 27.67 where it has been caught now for the whole last trading week.
After trading as low as 26.08 during the day, CarGurus found support at the 20-day moving average at 26.23. The last time this happened on June 10th, CARG actually lost -8.32% on the following trading day. Prices are trading close to the key technical resistance level at 27.17 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 27.67 where further buy stops could get triggered. Further buying might move prices higher should the market test June's close-by high at 28.60.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for CarGurus. Out of 193 times, CARG closed higher 51.81% 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 51.81% with an average market move of 0.94%.