This Thursday will be the big earnings day of this week, Jim Cramer told Mad Money viewers Friday night. Thursday is when we hear from several Cramer favorites including CarMax (KMX) .
We last looked at KMX on June 15 where we wrote that "It looks like KMX has reached a temporary high after being rejected in the resistance area from $90 to $103. We could see prices back up towards the $78-$80 area where they should be checked again." Prices declined until the middle of July and then rallied to new highs.
Let's check out the charts as prices look like they have rolled over again.
In this updated daily bar chart of KMX, below, we can see that prices have rolled over in recent weeks and are trading below the rising 50-day moving average line. The rising 200-day moving average line intersects down in the $90-$85 area.
The On-Balance-Volume (OBV) line shows improvement from early April but has stalled since the middle of July and has not been leading prices higher.
The Moving Average Convergence Divergence (MACD) oscillator made a lower high in August vs. June and is now close to crossing below the zero line.
In this weekly bar chart of KMX, below, we can see how prices could weaken in the weeks ahead. Prices are still in an uptrend above the rising 40-week moving average line.
The weekly OBV line made a slight new high in August and then weakened. Not a strong confirmation of the price action.
The MACD oscillator is bullish but it has narrowed in recent weeks and tells us that the power of the uptrend is fading.
In this daily Point and Figure chart of KMX, below, we can see a potential downside price target in the $95 area.
Bottom line strategy: KMX has rolled over and is pointed down. We have a Point and Figure chart target of $95 but the key level to worry about is the June/July lows in the $85 area. Drive and trade cautiously.
