Carmax Ready to Blow Up Just Before EarningsCarmax has got a good chance to go up pre and post earnings the Symbol has just hit the trend / resistance line.
Earnings are expected to be good when they are released pre market on Friday
KMX trade ideas
KMX: Cup and Handle Breakout Potential on EarningsI've bough a few cars from KMX over the years, and it's no surprise to me when a company I do business with does well financially on a macro scale. KMX has an excellent model with regional branches and locations handling sales and maintenance and even finance, so they also tap into the financial services marketplace. New sales in the US are slightly down from 2018 to 2019, but not by an alarming margin, but that plays into the hand of used auto sales marketplaces. This is a firm that has had successive growth year over year, and I think they'll do it again. Volume picked back up, and I'm confident that this cup and handle pattern is setting up well. Traders attempting to short at the end of last week finally threw in the towel leaving almost no one shorting this stock right now.
The technicals show KMX breaking out of a horizontal channel after a period of consolidation in May. To their credit, they lost no value for the month of April and would have been a good long term hold the entire if you bought back in late January or early February. They just excceeded and held their September 2018 highest high for three days through a broader short-term consolidation of the US stock market after a record week last week, so this all looks good to me. All short term moving averages are above longer term averages, and the recent consolidation in May has given up some pressure on price strength giving the stock more room to breath. MACD and ADX show the current uptrend picking back up, and the quarterly rate of change indicator is still rising.
All signs point to yes on this one.
$KMX Carmax is in the sweet spot of Retail. BullishEarnings are approaching and NYSE:KMX is one of the sweet spots in retail. New car sales are declining which limits the supply of second hand cars , this in turn increases demand and prices in the second hand market, improving margins and earnings. The same can be said for parts suppliers etc as cars are been maintained for longer. The chart illustrates just how good the sector is, the price is about to bang heads with the ATH level once again and earnings may be the stimulus to get past that level. Set alert for break above $82.
AVERAGE ANALYSTS PRICE TARGET $83
AVERAGE ANALYSTS RECOMMENDATION BUY
P/E RATIO 16
COMPANY PROFILE
CarMax, Inc. is as a holding company, which engages in the retail of used vehicles and wholesale vehicle auction operator. It operates through the CarMax Sales Operations and CarMax Auto Finance (CAF) business segments. The CarMax Sales Operations segment consists of all aspects of its auto merchandising and service operations. The CAF segment provides vehicle financing to customers buying retail vehicles. The company was founded by Richard L. Sharp and William Austin Ligon in September 1993 and is headquartered in Richmond, VA.
KMX: Another Earnings Suprise Crossing into a RallyI'm a little late on publishing this idea, but I'm not late on holding on here. Carmax is currently getting two monthly payments from our household, so I know this company is generating a cashflow, and so does everybody else after their solid 11% earnings surprise about two weeks ago. I've been holding and watching and waiting to publish before seeing a trend confirmed, and I have now.
KMX is having the 20 day moving average cross over the 200 day in a test alongside a volatile background market beta, but it's continued to chug along and keep my portfolio afloat. MACD is positive and the histogram is continuing to break positive with plenty of room to go in this current trend. ADX and DM+ are pulling along strongly upward together with only the first hint of this trend being challenged, and I'm not even phased by that given the broader market right now. RSI is a little high at about 77, so I do expect the next week to be a test for a longer term rally, but the momentum of the averages alongside very strong company fundamentals means that their price got massacred in late 2018 from everyone else and the street is about to see if they can go higher.
There are some headwinds in the form of declining volume, but that's expect after so many big money trading desks have scaled up their holdings last month. Declining short interest when the price is being tested is the only signal I need to keep holding on here because even the bears are scared to bet against this current earnings rally. There's plenty of steam left for you to get on the bandwagon during this current price resistance testing.
Well that was fun, KMX... but now let's settle down for a bit. KMX beat on earnings, but did it deserve to jump so high? They've returned to growth, ie stopped sucking. But was that worth such a huge and quick gap between 50/200dma. I'm hoping that it's going to deflate a bit in the very near term... at least drop to it's 200dma for a moment...
Long put at 60 for May. It's only .15 to buy and underlying would only have to drop to 68 by monday to make 70% profit...
KMX is approaching resisatnce, potential drop! KMX is approaching our first resistance (horizontal overlap resistance, 61.8% fibonacci extension, 61.8% fiboancci retracement) where we might see a drop in price to our first support (Horizontal pullback support, 61.8% fibonacci retracement). Stochastic is approaching resistance as well.
KMX Reversed From Resistance, Potential Drop!KMX reversed from its resistance where it could potentially fall further to its support.
KMX Approaching Resistance, Potential Reversal!KMX is approaching its resistance where a reversal could occur.
KMX Reversed From Resistance, Potential Drop!KMX reversed from its resistance where we expect to see a further drop to its support.
KMX approaching support, potential bounce! KMX is approaching our first support at 58.15 where we might see a corresponding bounce in price to our first resistance.
Stochastic is approaching support as well.
KMX Bounced Off Its Support, Potential RiseKMX bounced off its support where it could potentially rise to its resistance
KMX Approaching Support, Potential Bounce!KMX is approaching support where a potential bounce to its resistance could occur.
KMX appraoching support, potential bounce! KMX is approaching our first support at 54.37 (horizontal swing low support, 100% fibonacci extension, 61.8% fibonacci retracement) where a strong bounce might occur to our first resistance at 67.25 (horizontal overlap resistance, 50% fibonacci retracement).
Stochastic (89,5,3) is also approaching resistance where we might see a corresponding bounce in price.
KMX Approaching Resistance, Potential Reversal!KMX is approaching resistance where we expect to see a reversal to its support.
Stochastic is also approaching resistance where a corresponding reversal is expected.
KMX Approaching Support, Potential Bounce!KMX is approaching its support at 59.53 (61.8% Fibonacci extension, 61.8% Fibonacci retracement, horizontal swing low support) where it could potentially bounce to its resistance at 67.10 (61.8% Fibonacci retracement, horizontal overlap resistance).
Stochastic (55, 5, 3) is approaching its support at 3.4% where a corresponding bounce could occur.
KMX Bounce candidateKMX getting to the bottom of a measured move. Will watch this for a short term bounce. Could see a 382 rebound if it catches support.
Probably continue lower after that.
$KMX - Ouch If you like taking candy from a baby - this one's for you. $CRMT earnings this week could put a dent in a new 52 week low - we'll see how the rest of auto-dealerships hold up though. Could get interesting
