chuckination

KMX: Another Earnings Suprise Crossing into a Rally

Long
NYSE:KMX   CARMAX INC
I'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.
Sound engineering requires a firm basis of scientific theory, mathematics, experience, and a little bit of luck; so does a successful long-term investment strategy.

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