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Carvana Co (CVNA) Goes South, Watch This Trade Level

Carvana Co (CVNA) is trading lower today by more than 5.0% to $202.61 a share. The stock has been a big winner in 2020 making a new all time high on October 1st, 2020 at $242.15 a share. The leading e-commerce platform stock for buying used cars is coming under heavy selling pressure recently. Traders should note that the stock is now breaking below its important 50-day moving average. A close below this key moving average will put the stock in a weak technical position on the daily chart. It will often indicate lower prices ahead for the shares.

At this time, the stock looks to be working off an overbought condition on the daily and weekly charts. The one support level that has caught my eye is a major gap fill around the $173.67 area. This major gap fill is from September 21st, 2020. It is also a support area that is also very close to the 20-week moving average which is usually defended by the institutional crowd. This combination of support should serve as very good support on the daily chart when tested. Please remember, Carvana Co (CVNA) is scheduled to report earnings on October 29th, 2020.

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