When building your watch list, focus on stocks with an 80 or higher RS Rating. CarMax just cleared that benchmark with an upgrade from 79 to 82.
This unique rating measures market leadership by showing how a stock's price movement over the last 52 weeks compares to that of other stocks on the major indexes.
History reveals that the top-performing stocks often have an RS Rating north of 80 as they launch their biggest climbs.
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CarMax broke out earlier, but has fallen back below the prior 88.87 entry from a cup with handle. In the scenario where a stock breaks out then falls 7% or more below the entry price, it's considered a failed breakout. If that happens, it's best to wait for a new pattern to form. Also understand that the latest pattern is a later-stage base, and those involve more risk.
In terms of revenue and profits, CarMax has posted rising EPS growth over the last three quarters. Revenue growth has also risen during the same period.
The company earns the No. 10 rank among its peers in the Retail/Wholesale-Auto Parts industry group. ACV Auctions, Group 1 Automotive and Asbury Automotive are among the top 5 highly rated stocks within the group.
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