KMX runs into sellers again around 98.69
CarMax Inc (KMX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, KMX ended the month 8.29% higher at 96.97 after losing $1.36 (-1.38%) today, notably underperforming the S&P 500 (0.77%). Closing below Thursday's low at 97.39, CarMax confirmed its breakout through the prior session low after trading up to $1.34 below it intraday.
Daily Candlestick Chart (KMX as at Jul 31, 2020):
Friday's trading range has been $2.64 (2.68%), that's slightly above the last trading month's daily average range of $2.45. 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 slightly higher than usual for KMX.
Notwithstanding a strong opening the stock closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 13th, KMX actually gained 4.66% on the following trading day.
Prices are trading close to the key technical support level at 95.96 (S1). After having been unable to move above 98.84 in the prior session, the share ran into sellers again around the same price level today, missing to move higher than 98.69.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 99.44 where further buy stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for CarMax. Out of 88 times, KMX closed higher 56.82% 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 56.82% with an average market move of 0.58%.