KMX closes below its opening price unable to hold early session gains
CarMax Inc (KMX) Technical Analysis Report for Dec 04, 2019 | by Techniquant Editorial Team
KMX finished Wednesday at 96.41 gaining $0.42 (0.44%), slightly underperforming the S&P 500 (0.63%). Trading $1.24 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on November 25th, KMX actually gained 0.83% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (KMX as at Dec 04, 2019):
Wednesday's trading range has been $1.66 (1.71%), that's slightly above the last trading month's daily average range of $1.65. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for KMX.
Prices are trading close to the key technical support level at 96.28 (S1). After spiking up to 98.05 during the day, the market found resistance at the 20-day moving average at 96.94.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CarMax. Out of 53 times, KMX closed higher 50.94% 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 62.26% with an average market move of 2.03%.