CVNA pushes through Thursday's high
Carvana Co. Class A (CVNA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CVNA ended the week 4.09% higher at 96.45 after edging higher $1.71 (1.8%) today on low volume, significantly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $1.80 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 96.20, the share confirmed its breakout through the prior session high after trading up to $0.77 above it intraday.
Daily Candlestick Chart (CVNA as at May 22, 2020):
Friday's trading range has been $4.37 (4.63%), that's below the last trading month's daily average range of $7.71. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CVNA.
After having been unable to move above 96.20 in the previous session, Carvana Co. ran into sellers again around the same price level today, missing to move higher than 96.97. The last time this happened on Wednesday, CVNA actually gained 3.98% on the following trading day.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 101.65 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. Its common bullish interpretation has been confirmed for Carvana Co.. Out of 147 times, CVNA closed higher 61.22% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.82% with an average market move of 4.63%.