#Carvana #Levels #Watch #Stock #Jumps #Strong #Earnings #Outlook #Boost
Key takeaways
- Carvana shares rose in extended trading Wednesday after the online auto dealer beat Wall Street’s third-quarter earnings estimates and raised its full-year forecast.
- The stock recently retraced its 200-week moving average and is poised to break above the upper trend line of a rising wedge pattern following the company’s better-than-expected quarterly results.
- Investors should watch the key general price levels on the Carvana chart around $240, $300, and $365.
- During corrections, investors should keep a close eye on the $165 level, which is the location where stocks are most likely to attract buying interest near the September 2020 pullback low and the January 2022 countertrend high.
Shares of Carvana (CVNA) rose in extended trading Wednesday after the online auto dealer beat Wall Street’s third-quarter estimates and raised its full-year outlook, boosted by strong auto sales.
The company said it expects 2024 profits to be much higher than its previous forecast of $1 billion to $1.2 billion, supported by an increase in retail vehicle sales between the third and fourth quarters.
Carvana shares rose 20% to $248.99 in after-hours trading. By the end of regular trading hours on Wednesday, the stock had risen nearly four-fold since the beginning of the year.
Below, we take a closer look at the technical aspects on Carvana’s weekly chart and identify several key post-earnings price levels that are likely to attract attention.
High wedge penetration
Since bottoming out in December 2022, Carvana shares have traded within a rising wedge, a chart pattern characterized by two converging, upward-sloping trend lines.
Recently, the stock retraced its 200-week moving average and threatened to break above the pattern’s upper trend line. The move looks set to happen on Thursday, as the price prepares for a decisive breakout following the company’s better-than-expected quarterly results.
Let’s identify three main general post-earnings levels on the Carvana chart and also point out an important support area to watch during corrections.
Key general levels to monitor
The first important overall level to pay attention to is around $240, an area where stocks could come under selling pressure near multiple tops and bottoms on the chart between August 2020 and May 2021.
A convincing close above this key technical level could send shares rising to the $300 area. This area may face resistance around the psychological round figure and a trend line that joins a group of similar trading levels from January to November 2021.
Further buying could lead to a rally to around $365, a position where investors could look to unload shares just below the notable August 2021 peak and the stock’s all-time high (ATH).
Critical support area for monitoring
As the Relative Strength Index (RSI) is poised to achieve its highest reading since 2018 following a post-earnings jump, the stock is still vulnerable to profit taking.
During corrections, investors should keep a close eye on the $165 level, a location on the chart where stocks are likely to attract buying interest near the September 2020 pullback low and the January 2022 countertrend high.
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As of the date of writing this article, the author does not own any of the securities mentioned above.
#Carvana #Levels #Watch #Stock #Jumps #Strong #Earnings #Outlook #Boost
