CPRT runs into sellers around 93.30 for the third day in a row
Copart Inc. (CPRT) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CPRT finished the month 11.99% higher at 93.25 after gaining $0.52 (0.56%) today, slightly underperforming the S&P 500 (0.77%). Today's close at 93.25 marks the highest recorded closing price since February 21st. Trading up to $1.97 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CPRT as at Jul 31, 2020):
Friday's trading range has been $2.16 (2.32%), that's slightly below the last trading month's daily average range of $2.26. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CPRT. Prices continued to consolidate within a tight trading range between 89.35 and 93.35 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
After trading down to 91.14 earlier during the day, the market bounced off the key technical support level at 93.08 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Monday, CPRT actually lost -1.76% on the following trading day. Copart ran into sellers again today around 93.30 for the third trading day in a row after having found sellers at 93.35 in the previous session and at 93.05 two days ago.
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 93.35 where further buy stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Copart. Out of 125 times, CPRT closed higher 58.40% 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 64.00% with an average market move of 1.02%.