In a welcome move, CarMax saw its Relative Strength Rating improve from 64 to 72 on Friday.
This proprietary rating tracks market leadership by using a 1 (worst) to 99 (best) score that identifies how a stock's price action over the trailing 52 weeks compares to the rest of the market.
History reveals that the stocks that go on to make the biggest gains often have an 80 or higher RS Rating in the early stages of their moves. See if CarMax can continue to rebound and hit that benchmark.
When To Sell Stocks To Lock In Profits And Minimize Losses
CarMax broke out earlier, but is now trading about 5% below the prior 86.82 entry from a cup without handle. If a stock you're tracking clears a buy point then retreats 7% or more below the original entry price, it's considered a failed base. Wait for the stock to set up and breakout from a new chart pattern and entry price. Also keep in mind that the most recent pattern is a later-stage base, and those involve more risk.
Taking a look at revenue and profit performance, CarMax has posted three quarters of rising earnings growth. Sales growth has also increased over the same time frame.
CarMax holds the No. 8 rank among its peers in the Retail/Wholesale-Auto Parts industry group. ACV Auctions, Group 1 Automotive and Lithia Motors are among the top 5 highly rated stocks within the group.
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