Carvana (CVNA) Surges 4.5% on Bullish Momentum Amid Valuation Dilemma

Summary
• Carvana’s stock (CVNA) surges 4.498% to $331.49, hitting an intraday high of $331.49 and a low of $319.58.
• DCF analysis flags CVNA as overvalued by 17.7%, while its 72.6x PE ratio far exceeds the sector average of 19.5x.
• Options activity intensifies, with 2025-11-28 expiration contracts showing high implied volatility and leverage ratios.

Carvana’s sharp intraday rally reflects a tug-of-war between bullish operational momentum and valuation skepticism. With the stock trading near its 52-week high of $413.33, investors are weighing recent partnership announcements against a DCF model suggesting overvaluation. The $331.49 level now tests critical technical resistance as options traders position for volatility.

Operational Gains and Strategic Partnerships Fuel Carvana's Rally
Carvana’s 4.5% intraday surge is driven by renewed investor confidence in its operational turnaround. Recent news highlights partnerships enhancing brand visibility and operational efficiency, which analysts link to improved Q3 results. However, the DCF model’s $274.62 fair value estimate and 72.6x PE ratio—well above the sector’s 19.5x—signal a valuation disconnect. The rally appears to reflect speculative bets on growth potential rather than fundamental re-rating, with traders capitalizing on short-term momentum ahead of the 2025-11-28 options expiration.

Options Playbook: Leveraging Volatility in Carvana's Bullish Run
• MACD: -8.71 (bullish divergence from signal line -10.24)
• RSI: 39.62 (oversold territory, suggesting potential rebound)
• Bollinger Bands: Upper $364.10, Middle $325.17, Lower $286.25 (price near upper band)
• 200D MA: $301.93 (price above by 9.7%)

Carvana’s technicals suggest a short-term bullish bias, with the 30D MA at $332.18 acting as immediate support. The RSI in oversold territory and MACD divergence hint at a potential rebound. For options, focus on contracts with high leverage and moderate delta to capitalize on volatility. Two top picks from the 2025-11-28 chain:

• CVNA20251128C335 (Call, $335 strike, 2025-11-28):
- IV: 57.96% (moderate)
- Leverage Ratio: 31.42%
- Delta: 0.460 (moderate sensitivity)
- Theta: -1.21 (high time decay)
- Gamma: 0.0125 (moderate price sensitivity)
- Turnover: 101,125 (high liquidity)
- Payoff (5% upside): $15.74 per contract (max(0, 348.06 - 335))
This call offers a balance of leverage and liquidity, ideal for a 5% upside scenario. The high turnover ensures easy entry/exit, while the moderate delta and gamma position it to benefit from continued price momentum.

• CVNA20251128P325 (Put, $325 strike, 2025-11-28):
- IV: 60.61% (moderate)
- Leverage Ratio: 31.07%
- Delta: -0.416 (moderate downside protection)
- Theta: -0.036 (low time decay)
- Gamma: 0.0118 (moderate price sensitivity)
- Turnover: 9,397 (reasonable liquidity)
- Payoff (5% upside): $13.06 per contract (max(0, 325 - 348.06))
This put provides downside insurance with a low theta, making it suitable for a volatile environment. The moderate delta ensures it gains value if the rally stalls, while the high IV reflects market uncertainty.

Aggressive bulls may consider CVNA20251128C335 into a bounce above $330.

Backtest Carvana Stock Performance
Key findings for Carvana (CVNA.N) after an intraday gain of 4 % or more (2022-01-01 – 2025-11-19)• Scope and method – 210 events met the 4 %‐surge criterion. – Close-to-close returns were tracked for 30 trading days after each event (benchmark: buy-and-hold in CVNA). – No additional risk filters were applied.• Performance snapshot – Day 1 average return: -0.72 % (win-rate 46 %). – Day 5 average return: -0.29 % (44 % win-rate). – Day 10 average return: +2.88 % (51 % win-rate). – Day 30 average return: +12.54 % (57 % win-rate). – None of the horizons reached statistical significance at the 5 % level; results therefore point to weak and inconsistent follow-through.• Interpretation – A 4 % intraday pop in CVNA has not been a reliable short-term continuation signal. – Momentum effects appear only gradually and remain mixed versus a passive position. – Traders seeking to exploit the pattern should combine it with stronger filters (e.g., volume spikes, macro backdrop) or apply strict risk controls.• Assumptions auto-selected – 30-day event window: industry convention for short-term studies. – Price basis: closing prices to minimize intraday noise.You can interactively examine the full statistical panel and distribution charts below.Feel free to explore the module for deeper period-by-period details or let me know if you’d like additional filters or strategy overlays.

Act Now: Carvana's Rally Faces Valuation Crossroads
Carvana’s 4.5% intraday surge hinges on whether its operational momentum can justify the 72.6x PE ratio and 17.7% DCF overvaluation. Key levels to watch include the 30D MA at $332.18 and the 200D MA at $301.93. A break above $335 could trigger a retest of the 52-week high, while a pullback below $320 may reignite valuation concerns. Meanwhile, Walmart (WMT), the sector leader, trades down 0.22%, underscoring the speculative nature of CVNA’s move. Investors should prioritize options with high leverage and liquidity to navigate this volatile phase. Watch for $320 breakdown or regulatory reaction.