Online car retailer Carvana ( CVNA) was cut to an underweight rating by a large sell side firm Monday. We did not favor the upside of CVNA in our May 11 review, but things change and a fresh look is needed. 
In this daily bar chart of CVNA, below, we can see some bottoming price action in the June/July time period. Prices have firmed above the bottoming 50-day moving average line. The 200-day line is still in a decline and intersects above $125. Trading volume has been heavy since late April.
The On-Balance-Volume (OBV) line made a low in May and shows some improvement and the return of more aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is ready to cross above the zero line for an outright buy signal.
In this weekly Japanese candlestick chart of CVNA, below, we can see some recent improvement. Prices have rallied after finding support in the $25 area. The weekly OBV line has jumped higher from early June. The MACD oscillator has crossed to the upside for a cover shorts buy signal.
In this daily Point and Figure chart of CVNA, below, we can see an upside price target in the $96 area.
In this weekly Point and Figure chart of CVNA, below, we can see a $105 price objective.
Bottom line strategy: CVNA shows buying interest (support) in the $25 area. The charts and indicators have improved and we could see some further price recovery in the short-run. Unfortunately what I see as the risk/reward ratio is not all that favorable so I am not recommending the long side of CVNA.
