Copart is an online vehicle auction and vehicle remarketing business. Its major customers include rental companies, insurance companies, fleet operators, and car dealerships. On the buy-side, Copart caters to retail buyers, vehicle importers, vehicle rebuilders, and dismantlers. The company benefits from the network effects of having buyers and a wide selection of vehicles. Having parking lots to hold a large inventory in critical urban pockets is another competitive advantage for Copart. Its long term prospects look bright.

The monthly long-term chart for Copart shows a strong uptrend for close to 5 years, since about 2016. While this timeframe trend has been upward, there was a significant pullback in February and March 2020 when the price fell by more than 45% and broke the bottom trend line. Since then, the price has bounced back up and has recently found support at the $104 level. This level is an important one as it was previously resistant and is now acting as a support. The following price target looks likely to be $128. A stop-loss can be placed at $102, the low of the previous month’s candle.

Position entered into our long-term tracking portfolio today. The entry point is at $113.42, and the stop-loss placed at $100.76, which is 11% below the entry point. The short-term to medium take profit at the top of the trend is set at $131.42, giving a profit of 16%.