It's not at all unusual for a stock to stumble upon a key gap support or gap resistance level, but in the case of Carmax, Inc. (KMX), there's one of each.
In what may have been the worst trading day ever for KMX on September 29, 2022, the stock gapped down significantly and then proceeded to drop all day long, resulting in the loss of 25% of its market cap in just one session. As you might expect, the volume that day was monstrous - the 2nd highest daily volume since 2010. Two weeks ago, KMX climbed all the way back up to test that gap resistance at 86.42:
Enter Carmax, Inc. (KMX):
KMX has since pulled back and is approaching its 20-day EMA, which could offer up solid support. If that fails, however, KMX will be staring down what should be excellent gap support at 78.32, the close before its latest quarterly earnings report was released. So which is more important - gap resistance at 86.42 from September 2022 OR gap support at 78.32 from two weeks ago? I don't know for sure, but we're current trading within a very important trading range. Whichever way this breaks will likely dictate the future price direction of KMX - at least until its next earnings report is released!
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Happy Trading!Tom BowleyChief Market StrategistEarningsBeats.comBetter Timing. Better Trades. |