CarMax Inc. (KMX) Shares Active after Upgrade at Zacks Investment Research

CarMax Inc. (NYSE: KMX) shares fell back in value yesterday on slower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a upgraded rating.

Analysts at Zacks Investment Research upgraded shares of CarMax Inc. (NYSE: KMX) from Hold to Buy today. With a rating of Buy on the stock, the company has a 52-week high of $60.81. The one-year price target of $61.75 is above the opening price of $52.77, that has caused a number of other analysts to comment on the company recently. Stock prices often move to the upside on recommendations and new price targets of professional analysts.

Meanwhile, U.S. stocks closed flat Thursday as trading stayed lukewarm in the wait for the nonfarm-payrolls report. U.S. employment growth likely picked up in September, putting pressure on the Federal Reserve to raise interest rates

For the week so far, the Dow industrials DJIA, -0.07% are down 0.2%, the S&P 500 SPX, +0.05% is off 0.4%, and the Nasdaq Composite COMP, -0.17% has lost 0.1%.

CarMax Inc. (NYSE: KMX) shares last traded at $52.78, which represents a dip of $0.32 per share or -0.01 from the previous closing price. Opening at $52.77, they fluctuated from $52.58 and $53.09 throughout the day.

CarMax Inc. (NYSE: KMX) now has a market cap of 10.09B.

CarMax Inc.Trading Volume

1,361,992 shares crossed the trading desk yesterday, below normal, out of a total float 189,944,000. Investors often use swings in trading volume to identify large volume accumulation or dissemination by institutional investors, so look for trading volume to pick up in the coming days.

As with all possible breakouts, investors watch for volume to be at least 40%-50% above normal on the breakout to show that fund managers and other professional investors are jumping in.

Institutional sponsorship commonly refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These professional investors retain teams of analysts that research thousands of stocks, so it is good corroboration to see them buying a stock you are researching.

CarMax Inc. Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By spotting trends, moving averages allow investors to make those trends work in their favor and increase the number of winning trades.

Trades for CarMax Inc. (NYSE: KMX) have ranged from $41.25 – 60.81, and the stock now has a 50-day MA of $56.53 and 200-day MA of $53.74. Today’s last price is 0.13% lower than the 52 week high of $60.81.

Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors seek companies that have increased their earnings by at least 25% over a 3 year period.

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