During Friday night's Mad Money program, Jim Cramer looked at the best performers in the S&P 500 in 2019. Jim Cramer liked Copart (CPRT) , the auto company that's in a special category with no real competition. The company provides vehicle sellers with a range of services to process and sell salvage and clean title vehicles over the internet.
In this daily bar chart of CPRT, below, we can see that prices have nearly doubled in the past 12 months. CPRT has only experienced shallow or sideways corrections the past year. Prices are above the rising 50-day moving average line and above the rising 200-day moving average line. Trading volume looks like it has increased since September and that is a positive development as rising volume and rising prices are a good technical combination.
The daily On-Balance-Volume (OBV) line has been rising all year and tells us that buyers of CPRT have been more aggressive in the past year.
The 12-day momentum study shows a lower high in momentum from late November to early January as prices made higher highs. This is a bearish divergence and can, at times, foreshadow a correction to the downside.
In this weekly bar chart of CPRT, below, we can see that prices are up three-fold over the past three years. CPRT is above the rising 40-week moving average line.
The weekly OBV line is pointed higher in new high ground and tells us that buyers of CPRT on this longer time frame have been more aggressive the past three years.
The 12-week price momentum study has lower highs the past year and tells us that the rate of price acceleration has been slowing despite prices making higher highs. This price divergence is bearish but it is not a precise timing tool.
In this first Point and Figure chart of CPRT, below, we used daily data and here a potential price target of $98 is being indicated.
In this second Point and Figure chart of CPRT, below, we used weekly close only data. Here a potential longer-term price target of $144 is being projected.
Bottom line strategy: The rally in CPRT is slowing and that could be foreshadowing a correction or pullback in price in the days and weeks ahead. Bearish divergences are not precise timing tools so this is not a recommendation to go short. If CPRT corrects to the downside it could be a buying opportunity for further strength in the first quarter of 2020. $98 and $144 are our potential upside price targets.
