Carmax Inc. (KMX)–03-31-2011

March 31, 2011 · Filed Under Swing Trades · 1 Comment 


I’m not sure how Carmax isn’t on my blog already since I owned it for an extended period in 2009, but it must have been one that was triggered off a machine trade.  I always feel weird posting stocks that I already own – like I’m just trying to pump up my own goods – so I usually end up skipping those unless I’m debating adding to my position and need to go through my normal blogging thought process. 

Carmax spent a good amount of time on the IBD list a while back, but the reason it’s interesting to me now is because it ate a 7% loss today after beating estimates slightly.  The drop was attributed to same store sales disappointing, which can be a good indicator of market sentiment towards retailers right now in general.  If sales numbers keep failing to impress, and the market keeps looking for excuses to punish stocks, it will be a strong signal that this is a good year to sit out the summer.  Yes, it’s already getting close to the summer…

As for KMX, it just passes the first rule of being interesting: volatility.  There should be some nice swing trades in the near future if you’re an agile trader.  The weekly chart still has a couple levels of support too.  The immediate one is up around $31, and the previous breakout point of $27 is also strong.  There might also be some interesting options plays in that no-man’s land, but we’ll have to see when we get there.