KMX closes below its opening price unable to hold early session gains
CarMax Inc (KMX) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
KMX ended Thursday at 60.92 losing $2.96 (-4.63%), strongly underperforming the S&P 500 (6.24%). Trading $2.55 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (KMX as at Mar 26, 2020):
Thursday's trading range has been $6.99 (10.77%), that's slightly above the last trading month's daily average range of $6.65. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for KMX.
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 Black Candle.
After having been unable to move above 68.24 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 67.45. The last time this happened on March 19th, KMX lost -8.02% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CarMax. Out of 546 times, KMX closed higher 56.23% 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 52.20% with an average market move of 0.46%.