KMX closes above its opening price after recovering from early selling pressure
CarMax Inc (KMX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, KMX finished the week 7.59% higher at 81.55 after gaining $1.13 (1.41%) today, significantly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 81.55 marks the highest recorded closing price since March 6th. Trading up to $0.92 lower after the open, CarMax managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 15th, KMX gained 5.21% on the following trading day. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (KMX as at May 22, 2020):
Friday's trading range has been $2.03 (2.52%), that's below the last trading month's daily average range of $3.17. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for KMX.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the nearby swing high at 83.76 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 77.79 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for CarMax. Out of 321 times, KMX closed higher 54.83% 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 56.70% with an average market move of 0.98%.