Carvana Stock Analysis: Shooting Star Pattern Warns of Potential Downturn
Carvana (CVNA) stock plunged 10% in extended trading Wednesday despite reporting better-than-expected earnings. The drop comes after a five-fold surge in share price over the past year.
Key Technical Indicators:
* Shooting star candlestick: Formed on Wednesday before earnings, signaling a potential move lower.
* Ascending channel: Shares have traded within an ascending channel since April 2022.
Important Support Levels:
* $235: 50-day MA and trendline support.
* $210: Ascending channel's lower trendline.
* $175: Confluence of support from previous highs and lows, 200-day MA.
Key Resistance Area:
* $375: Ascending channel's upper trendline.
Outlook:
Investors should watch support levels closely, with a breakdown below the ascending channel potentially triggering a further decline. If the channel remains intact, the upper trendline will provide resistance.