Earnings Play: Copart

Copart's stock price is overbought and just below record highs, here is how to play it.

Charts (2)

On Wednesday, after market, Copart (CPRT) is anticipated to report fourth quarter EPS of $0.38 compared to $0.60 last year on revenue of approximately $436.3 million vs. $542.6 million a year earlier. The company is a provider of online auctions and remarketing services for salvaged vehicles, and on August 13th, the company opened a new 56-acre location in Jacksonville North, Florida, marking its 14th location in the state.      

Technically speaking, on a daily chart, Copart's stock price has been rising and holding above a bullish trendline since mid-March. The RSI is currently 78 and has been in overbought territory since the beginning of August after price broke out from its 92.50 level. Price is currently sitting just below the stock's all-time high of roughly 105.00. Given that the RSI has spent a month in overbought territory and that the daily real bodies of the candle sticks are small, it is likely that price will pull back. If price pulls back and holds above the rising trendline, then price will probably bounce, break through 105.00 and continue its advance to 117.50. However, if price falls below the trendline, then it might drop back to the 92.50 support level. If price cannot find support at the 92.50 level, it could possibly slip further to 86.50, a bearish move that could signal a new short-term downtrend.            

Source: GAIN Capital, TradingView

More from Earnings

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.