KMX finds buyers around 88.53 for the third day in a row
CarMax Inc (KMX) Technical Analysis Report for Jul 02, 2020 | by Techniquant Editorial Team
KMX finished Thursday at 89.22 edging higher $0.20 (0.22%), slightly underperforming the S&P 500 (0.45%) ahead of tomorrow's Independence Day OBS market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (KMX as at Jul 02, 2020):
Thursday's trading range has been $3.85 (4.22%), that's slightly above the last trading month's daily average range of $3.77. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for KMX. Prices continued to consolidate within a tight trading range between 88.08 and 92.38 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Black Candle.
After spiking up to 92.38 during the day, CarMax found resistance at the 20-day moving average at 92.15. The stock found buyers again today around 88.53 for the third trading day in a row after having found demand at 88.34 in the previous session and at 88.08 two days ago. The last time this happened on May 7th, KMX gained 5.24% on the following trading day.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might speed up should prices move below the nearby swing low at 85.42 where further sell stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for CarMax. Out of 539 times, KMX closed higher 56.77% 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 53.62% with an average market move of 0.74%.