CarMax Gets A RS Rating Bump

In a welcome move, CarMax (KMX) saw its Relative Strength Rating improve from 70 to 73 on Tuesday. History reveals that the best stocks often have an RS Rating north of 80 as they begin their largest runs. See if CarMax can continue to show renewed price strength and hit that benchmark.

When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.

This exclusive rating from Investor’s Business Daily identifies market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock’s price behavior over the last 52 weeks compares to all the other stocks in our database.

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CarMax broke out earlier, but has fallen back below the prior 137.63 entry from a cup with handle. If a stock you’re watching climbs above a buy point then falls 7% or more below the original entry price, it’s considered a failed base. It’s best to wait for the stock to form a new consolidation and breakout. Also understand that the most recent consolidation is a later-stage base, and such bases are more prone to failure.

CarMax earnings grew 1,043% last quarter, up from -2% in the prior report. Revenue also increased, from 4% to 138%.

CarMax holds the No. 9 rank among its peers in the Retail/Wholesale-Auto Parts industry group. AutoNation (AN) and Lithia Motors (LAD) are also among the group’s highest-rated stocks.


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