KMX dominated by bears dragging the market lower throughout the day
CarMax Inc (KMX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
KMX ended Wednesday at 104.51 losing $0.50 (-0.48%), slightly underperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 104.76, the share confirmed its breakout through the previous session low after trading up to $0.44 below it intraday.
Daily Candlestick Chart (KMX as at Sep 16, 2020):
Wednesday's trading range has been $1.68 (1.59%), that's below the last trading month's daily average range of $2.44. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for KMX.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 106.26 (R1).
Although the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 106.44 where further buy stops might get activated. With prices trading close to this year's high at 109.31, upside momentum could accelerate should the market be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CarMax. Out of 53 times, KMX closed higher 62.26% 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 58.49% with an average market move of 1.45%.