CARG breaks back below 20-day moving average
CarGurus Inc. (CARG) Technical Analysis Report for Jul 28, 2020 | by Techniquant Editorial Team
CARG finished Tuesday at 25.33 losing $0.30 (-1.17%), underperforming the S&P 500 (-0.65%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CARG as at Jul 28, 2020):
Tuesday's trading range has been $0.86 (3.38%), that's below the last trading month's daily average range of $1.11. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CARG.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 24.86 earlier during the day, the market bounced off the key technical support level at 25.26 (S1). The failure to close below the support might increase that levels importance as support going forward. CarGurus closed back below the 20-day moving average at 25.52. When this moving average was crossed below the last time on July 13th, CARG lost -3.97% on the following trading day. After having been unable to move lower than 24.95 in the previous session, the share found buyers again around the same price level today at 24.86.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 25.89 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 24.16 where further sell stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for CarGurus. Out of 123 times, CARG closed higher 54.47% 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 nine trading days, showing a win rate of 49.59% with an average market move of 0.42%.