KMX closes above its opening price after recovering from early selling pressure
CarMax Inc (KMX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
KMX ended the week 2.61% higher at 98.81 after edging lower $0.08 (-0.08%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $0.61 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on February 4th, KMX gained 1.26% on the following trading day. 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 (KMX as at Feb 14, 2020):
Friday's trading range has been $1.10 (1.12%), that's far below the last trading month's daily average range of $1.77. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for KMX.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 97.97 earlier during the day, CarMax bounced off the key technical support level at 98.15 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 99.75 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 99.59 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 97.33 where further sell stops might get activated. With prices trading close to this year's high at 99.72, upside momentum could accelerate should the market be able to break out to new highs for the year. Trading close to December's high at 99.79 we might see further upside momentum if potential buy stops at the level get triggered.
Among the five 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 CarMax. Out of 438 times, KMX closed higher 54.34% 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 53.88% with an average market move of 0.48%.