CARMAX INC is setting up nicely for a breakout.

CARMAX INC (NYSE:KMX) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:KMX.

Zooming in on the technicals.

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

Taking everything into account, KMX scores 7 out of 10 in our technical rating. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, KMX is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• KMX is currently trading in the upper part of its 52 week range. The S&P500 Index is also trading in the upper part of its 52 week range, so KMX is performing more or less in line with the market.
• In the last month KMX has a been trading in the 81.28 - 87.50 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• When comparing the performance of all stocks over the past year, KMX turns out to be only a medium performer in the overall market: it outperformed 66% of all stocks.
• KMX is an average performer in the Specialty Retail industry, it outperforms 63% of 134 stocks in the same industry.

Check the latest full technical report of KMX for a complete technical analysis.

Why is NYSE:KMX a setup?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NYSE:KMX scores a 9 out of 10:

Besides having an excellent technical rating, KMX also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 86.21. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 84.36, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for KMX in the last couple of days, which is a good sign.

Trading setups like NYSE:KMX

For a potential trade one would typically wait until the stock breaks out of the consolidation zone to enter the stock and it could be sold again for a loss when it would fall back below the zone.

Disclaimer: This article is not intended to provide trading advice. It is crucial to conduct your own analysis and consider your own observations and trading style when making investment decisions. The article solely presents technical observations and should not be relied upon as a sole basis for trading.

Every day, new breakout setups can be found on ChartMill in our Breakout screener.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.