Carvana Stock Plunges 8.55% as Bearish Technicals Signal Further Downside Risk

Carvana (CVNA) shares declined 8.55% to close at $329.24 in the latest session, extending a three-day losing streak totaling 11.09%. This significant sell-off provides the immediate context for our multi-indicator technical assessment of the stock's trajectory.
Candlestick Theory
Recent price action reveals a concerning pattern. The last three sessions formed consecutive bearish candles with progressively lower lows ($360.91, $360.03, $329.24) and upper shadows failing to breach the $364 resistance, forming a Three Black Crows formation. This signals strong distribution near the $360-$370 zone, now confirmed as major resistance. Support emerges near $325 (early October swing low), with a breach potentially accelerating declines toward psychological support at $300. Prior indecision candles (like the October 7th Doji at $370.31) foreshadowed this bearish resolution.
Moving Average Theory
Carvana's moving averages depict a deteriorating trend structure. The 50-day MA (centered near $340) crossed below the 100-day MA (~$330) in late September, a medium-term bearish signal. Price currently trades below all key MAs (50, 100, 200-day), with the 200-day MA near $290 representing the next major support confluence. The inability to reclaim the 50-day MA after repeated tests in early October signaled underlying weakness. This configuration suggests persistent downward pressure dominates across timeframes.
MACD & KDJ Indicators
The MACD confirms bearish momentum acceleration. Its histogram resides deeply negative since late September, reflecting expanding downside momentum, while the signal line crossover persists southbound. Meanwhile, the KDJ oscillator resides in oversold territory (K=19, D=25, J=7), though not yet signaling a reversal. While %K is attempting to curl up slightly, this appears more reflective of immediate-term exhaustion than a reliable bullish divergence. These oscillators collectively suggest oversold conditions may develop soon but lack confirmation of trend reversal.
Bollinger Bands
Bollinger Bands show volatility expansion, with price breaching the lower band ($336) decisively. Band width expanded sharply during the recent plunge, indicating elevated selling pressure. The close significantly below the lower band (-2.58 SD) suggests a potential short-term oversold bounce is statistically probable, though not yet evident in price action. Sustained trading below the lower band is rare and often precedes mean reversion, but the breakdown itself is bearish until reclaimed.
Volume-Price Relationship
Volume analysis validates bearish conviction. Selling days (October 10th: 3.84M shares, October 1st: 3.3M shares, September 29th: 3.93M shares) consistently occurred on above-average volume during breakdowns, indicating strong distribution. Conversely, recovery attempts have been accompanied by muted volume, notably the October 3rd rebound attempt on only 1.94M shares – significantly below the September 29th volume peak. This divergence signals weak buying interest during rallies, undermining recovery sustainability.
Relative Strength Index (RSI)
The 14-period RSI now reads 28, firmly in oversold territory (<30) for the first time since June. Historically, CVNA has found temporary support during prolonged oversold episodes below 30 (e.g., May-June 2025). However, oversold RSI readings do not guarantee reversal; they function as warning signals during sustained trends. Given the lack of bullish confirmation from volume or candlesticks, RSI suggests heightened risk of a technical bounce but not necessarily a trend shift.
Fibonacci Retracement
Applying Fibonacci levels to the major rally from the March 2025 low (~$167) to the July 2025 peak ($413.33), key retracement zones emerge. The 38.2% level ($326) aligns closely with the October 10th low ($327.52), offering near-term support. A decisive break below opens the path to the 50% retracement near $290. The 61.8% retracement sits near $254. Overhead resistance clusters between the 23.6% ($350) and 200-day MA ($340-$350 zone), aligning with recent failed consolidation attempts.
Confluence & Divergence Summary
Bearish confluence dominates:
- Resistance confirmed near $350-$360 (Bands, Fib, MAs, Volume)
- Breakdown on expanding volume signals sustainability
- MACD & KDJ lack bullish divergences despite oversold readings
A notable divergence exists: The extreme oversold RSI and KDJ readings conflict with the absence of reversal confirmation in price, volume, or candlestick patterns. While this increases near-term bounce probability, it currently reflects bearish exhaustion rather than bullish reversal signals. The breach of $325-$327 Fibonacci support makes the $290-$300 zone the critical technical downside target unless buyers can forcefully reclaim $350 resistance.