Carvana Co. (CVNA) had rallied more than four-fold over the past year but now it looks like it will be correcting to the downside for a period of time. Let's check the charts and indicators to see if we can decide on a price target.
In this daily bar chart of CVNA, below, we can see a base pattern in the $15 to $25 area from December to the middle of April. From April the stock took off to the upside and stayed above the rising 50-day moving average line until recently. The daily On-Balance-Volume (OBV) rose quickly from late May to early September and it has turned sharply lower. The weakness in the OBV line tells us that sellers of CVNA have become more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to a take profits sell in early September and is now close to an outright sell signal.
In this limited weekly bar chart of CVNA, below, we can see that the slope of the 40-week moving average line is still pointed up but the weekly OBV line is pointed down and the MACD oscillator is crossing to the downside.
In this Point and Figure chart of CVNA, below, we can see a downside price target of $43.
Bottom line strategy: CVNA is going down and the only question is how far. $43 is the Point and Figure target but if prices reach $43 they could fall even further to $35 - the intersection of the 200-day moving average line.