Important points
Carvana stock soared in extended trading Wednesday after the online auto dealer significantly beat Wall Street’s third-quarter profit expectations and raised its full-year outlook. The stock recently regained its 200-week moving average and is poised to break above the company’s higher-than-expected quarterly results, trending in an upward wedge pattern. Investors should monitor Carvana’s chart for key overhead price levels around $240, $300, and $365. Investors should closely monitor the $165 level during the retracement. The stock is likely to attract buying interest around the downtrend low in September 2020 and the countertrend high in January 2022.
Carvana (CVNA) stock soared in extended trading on Wednesday after the online auto dealer beat Wall Street’s third-quarter expectations and raised its full-year outlook on the back of strong auto sales.
The company said it expects its 2024 profit to be significantly higher than previously expected between $1 billion and $1.2 billion due to higher retail auto sales in the third and fourth quarters.
Carvana shares rose 20% in after-hours trading to $248.99. By the end of regular trading Wednesday, the stock had nearly quadrupled since the beginning of the year.
Below, we take a closer look at the technicals of Carvana’s weekly chart and identify some key post-earnings price levels that could catch your attention.
rising wedge breakout
Since bottoming in December 2022, Carvana stock has been trading within an ascending wedge, a chart pattern characterized by two upwardly converging trend lines.
Recently, the stock has regained its 200-week moving average and is threatening to break above the pattern’s upper trendline. Prices are poised for a decisive breakout following the company’s better-than-expected quarterly results, a move expected to occur on Thursday.
Let’s identify the three major post-earnings overhead levels on Carvana’s chart, and also point out important support areas to monitor during retracements.
Key overhead levels to be aware of
The first important overhead level to look at is around $240, and the stock could encounter selling pressure near multiple peaks and troughs on the chart from August 2020 to May 2021. It’s a territory.
A convincing close above this key technical level could propel the stock into the $300 region. The region is likely to encounter resistance around the trend line joining the psychological round number and range of comparable trading levels from January to November 2021.
Further buying could accelerate the rally up to $365, with investors looking to offload the stock, which is just below the notable August 2021 peak and the stock’s all-time high (ATH). may draw attention to.
Important support areas to monitor
Stocks continue to trend toward profit-taking, given that the Relative Strength Index (RSI) is poised to hit its highest since 2018 after the earnings rally.
Investors should closely monitor the $165 level during the retracement. This level is the position on the chart where the stock is likely to attract buying interest near the September 2020 reversal low and January 2022 countertrend high.
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As of the date this article was written, the author did not own any of the securities mentioned above.
