The stock chart of CarMax, Inc. (KMX) has been rolling over the past four months and I don't think this is an audition for a Fast and Furious remake. Let's take a look at the charts and indicators to see if the sticker price is warranted.
In this daily bar chart of KMX, below, we can see a deteriorating chart picture. Prices rallied to a retest of the brief June high in September but the level of volume was far less than the June turnover, telling us that buyers were less committed.
Recently prices have broken below the 50-day moving average line and the slope of that average line has turned negative or bearish. The slower-to-react 200-day line is still rising but only four dollars below KMX.
The daily On-Balance-Volume (OBV) line has weakened from the middle of last month and tells us that sellers of KMX have turned more aggressive with heavier volume being seen when prices decline.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed below the zero line for an outright sell signal.
In this weekly bar chart of KMX, below, we can see the indicators weaken.
Prices are still above the rising 40-week moving average line but the weekly OBV line has turned lower and the MACD oscillator on this longer time frame has crossed to a take profits sell signal or a sell in an uptrend.
In this Point and Figure chart of KMX, below, we do not see any price prices but KMX did reach an older upside target of $74.
The chart shows that a decline to $72 would be a new low for the move down and that would probably generate a downside price objective.
Bottom line strategy: The charts and indicators of KMX look weak and I think the risk is for a decline to the $66 area in the weeks ahead. Stand aside.