CVNA enters Death Cross for the first time since April 4, 2019
Carvana Co. Class A (CVNA) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CVNA ended Thursday at 56.55 losing $5.96 (-9.53%), notably underperforming the S&P 500 (6.24%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CVNA as at Mar 26, 2020):
Thursday's trading range has been $10.15 (16.27%), that's slightly above the last trading month's daily average range of $8.95. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CVNA.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on March 12th, CVNA actually gained 12.83% on the following trading day.
Unable to break through the key technical resistance level at 63.12 (R1), the stock closed below it after spiking up to 64.00 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 52.23 in the previous session, the share found buyers again around the same price level today at 53.85.
Although Carvana Co. is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish. With its 50-day moving average crossing below its 200-day moving average, the market has entered a so-called "Death Cross" for the first time since April 4, 2019. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for Carvana Co.. Out of 110 times, CVNA closed lower 60.91% of the time on the next trading day after the market condition occurred.