Carvana Stock Plunges 6.28% As Bearish Signals Flash Across Key Technical Indicators

Technical Analysis of Carvana (CVNA)
Candlestick Theory
Carvana’s most recent session produced a bearish engulfing pattern, closing at $318.95 (down 6.28%) with a long red candle engulfing the prior day’s small green body. This signals strong selling pressure near the $337–$342 resistance zone established in early June. Support now emerges at $315–$300, aligning with consolidation levels from late May and the March swing high. Failure to hold $315 may trigger further downside.
Moving Average Theory
The 50-day MA ($328) recently crossed below the 100-day MA ($335), forming a bearish "death cross" — the first since April. Price has traded below both averages since June 10th, confirming short-term bearish momentum. The 200-day MA ($260) remains rising but is distantly supportive. This breakdown suggests sustained downward pressure unless reclaimed above the 50-day MA.
MACD & KDJ Indicators
MACD (12,26,9) generated a bearish crossover on June 7th, with the histogram deepening negative, confirming weakening momentum. KDJ shows oversold conditions (K:18, D:26, J:2), but recent oversold dips in early May preceded only fleeting recoveries. Divergence emerged as price touched higher highs in June while KDJ peaked lower, hinting at underlying exhaustion.
Bollinger Bands
Price breached the lower Bollinger Band ($320) on June 12th amid a 10% band expansion — the widest volatility since March. This breakdown below the lower band, coupled with expanding width, signals acceleration to the downside. A rebound toward the $330 middle band may attract selling pressure. Band contraction is needed to stabilize the trend.
Volume-Price Relationship
The sell-off on June 12th occurred on above-average volume (4.73M shares vs. 30-day avg. ~3.5M), validating bearish conviction. Notably, rallies since late April saw declining volume (e.g., June 6–9), while distribution days intensified. This volume asymmetry suggests institutional selling outweighs buying interest.
Relative Strength Index (RSI)
Daily RSI (14-period) fell to 42, exiting overbought territory (>70 on June 3rd) but not yet oversold. Weekly RSI (54) is diverging negatively from price peaks, signaling momentum decay. RSI must approach 30 to suggest exhaustion, but its warning nature requires confirmation—oversold readings in January preceded extended recoveries only after price consolidation.
Fibonacci Retracement
Using the March low ($162) and June high ($351), key retracement levels are:
- 38.2%: $280
- 50%: $256
- 61.8%: $232
Current price hovers near the 23.6% retracement ($315). A decisive break below may target $280–$256, where the 200-day MA and high-volume May support converge.
Confluence & Divergence
Confluence points strengthen the bearish outlook:
1. Death cross (MAs) aligns with MACD bearish crossover.
2. Volume-confirmed breakdown below $330 coincides with Bollinger Band breach.
3. RSI divergence and KDJ oversold readings lack bullish volume confirmation.
Notable divergence: While KDJ is oversold, RSI remains neutral, suggesting momentum decline isn’t exhausted. Probabilistically, Carvana appears vulnerable to further downside toward $280–$300 unless reclaimed above $330 on high volume.