Breakout for Avis Budget Group in the Charts?
Avis Budget Group Inc (CAR) has been soaring this year, but it has recently met resistance. If the stock breaks through this resistance line, it could be headed for a breakout. Read more to learn how to profit from this trade.
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Avis Budget Group Inc (CAR) has been soaring this year, but it has recently met resistance. If the stock breaks through this resistance line, it could be headed for a breakout. Read more to learn how to profit from this trade.
Avis Budget Group Inc (CAR) is a provider of automotive vehicle rental and car-sharing services. The company’s brands include Avis, Budget, and Zipcar. Avis targets the premium commercial and leisure segments of the travel industry, while Budget is focused on value-conscious customers.
The company has been enhancing its technology and improving its offerings. For instance, CAR is looking to simplify customers’ online interaction to make the reservation, pick-up and return process easier. CAR is also working on expanding its connected vehicles fleet. This will allow it to streamline operations and cut costs.
CAR had $576 million in cash on hand at the end of the most recent quarter compared to very little short-term debt. Management is also quite efficient judging by its return on equity of 220.3%. While sales are down over the past year, earnings are forecasted to soar 118.6% this quarter.
Its stock is undervalued based on its trailing P/E of 9.2 and appears fairly valued based on its forward P/E ratio of 22.73. The stock has shown bullish momentum and is up 132% for the year as reflected in the chart below. This has led to a Momentum Grade of B in our POWR Ratings system.
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Take a look at the 1-year chart of CAR below with added notations:
Chart of CAR provided by TradingView
CAR had a great start to 2021, but the stock has recently hit a wall at the $90 level (red). That barrier is also preventing the stock from hitting new 52-week highs. A solid close above that $90 mark should lead to much higher prices for the stock.
CAR has a 52-week resistance at $90. The possible long position on the stock would be on a breakout above that level with a protective stop placed under it.
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CAR shares fell $1.63 (-1.88%) in premarket trading Thursday. Year-to-date, CAR has gained 129.22%, versus a 12.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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