CARG closes above its opening price after recovering from early selling pressure
CarGurus Inc. (CARG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CARG ended the month 13.96% higher at 28.89 after gaining $0.96 (3.44%) today, strongly outperforming the S&P 500 (0.77%). Today's close at 28.89 marks the highest recorded closing price since February 13th. Trading up to $0.54 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 28.18, the share confirmed its breakout through the previous session high after trading up to $0.77 above it intraday.
Daily Candlestick Chart (CARG as at Jul 31, 2020):
Friday's trading range has been $1.40 (4.98%), that's slightly above the last trading month's daily average range of $1.22. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CARG.
One bullish candlestick pattern matches today's price action, the White Candle.
The market managed to close above the 200-day moving average at 28.71 for the first time since February 4th. When this moving average was crossed above the last time on January 15th, CARG gained 4.78% on the following trading day.
Crossing above the upper Bollinger Band for the first time since May 6th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 25.82 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for CarGurus. Out of 56 times, CARG closed higher 58.93% 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 57.14% with an average market move of 2.97%.