Carvana Drops 4.25% Amid Bearish Signals As Key Support At $338 Holds

Carvana (CVNA) declined 4.25% in the most recent trading session, closing at $344.24. This analysis evaluates the technical landscape using multiple methodologies.
Candlestick Theory
Recent candlestick patterns reveal heightened volatility, with the August 19 session forming a long red candle closing near its low ($344.24 after a $342.30–$361.14 range), confirming selling pressure after the prior day’s modest green candle. Key resistance is established between $360–$363, aligning with the August 18 high and 23.6% Fibonacci level. Support emerges at $338.50 (August 15 low), with a break below potentially targeting the $328–$330 zone corresponding to the July 30 low and the 38.2% Fibonacci retracement.
Moving Average Theory
The 50-day SMA (approximately $351) crossed below the 100-day SMA (approximately $335) in early August, signaling near-term bearish momentum. The current price ($344.24) trades below the 50-day SMA but remains above the 100-day and 200-day SMAs (latter near $280), indicating intermediate-term support. While the 50/100/200-day arrangement maintains a longer-term bullish sequence, sustained sub-50-day SMA trading may catalyze further downside.
MACD & KDJ Indicators
The MACD histogram resides in negative territory, with the MACD line below its signal line, reinforcing bearish momentum. Meanwhile, the KDJ oscillator shows an oversold signal with %K at 6.67 and %J deeply negative, suggesting potential near-term exhaustion in selling pressure. However, these diverging signals—bearish MACD versus oversold KDJ—reflect unresolved directional conflict. Traders should monitor whether oversold KDJ conditions precede a technical bounce.
Bollinger Bands
Price sits near the lower Bollinger Band (20-day SMA ~$350 ± 2σ), with bands expanding since mid-July, reflecting increasing volatility. Historically, such expansions have accompanied strong directional moves. The current proximity to the lower band may offer short-term support, but a confirmed close below this level could trigger accelerated selling toward $333–$325.
Volume-Price Relationship
Volume patterns show inconsistency: the July 31 rally to $413 occurred on 10.9M shares (year’s highest volume), confirming bullish conviction. Conversely, the August 19 sell-off saw only 2.04M shares—below the 20-day average—suggesting diminished capitulation. This divergence implies the downtrend may lack vigorous bearish participation, potentially limiting near-term downside barring renewed volume expansion.
Relative Strength Index (RSI)
The 14-day RSI reads approximately 28, firmly in oversold territory (<30). This aligns with July 30 conditions (RSI ~25) that preceded a sharp reversal. While such extremes often foreshadow technical rebounds, traders should acknowledge that RSI can remain oversold during strong trends. Confluence with the KDJ’s oversold signal strengthens the case for a near-term relief rally, though it doesn’t guarantee trend reversal.
Fibonacci Retracement
Using the swing low of $151.13 (August 20, 2024) and high of $413.34 (July 31, 2025), key retracement levels are $351.46 (23.6%), $313.18 (38.2%), and $282.23 (50%). The current price sits between the 23.6% and 38.2% levels, implying $313 is a critical downside target if $338 support fails. The 23.6% level now acts as resistance, reinforcing the $360–$363 ceiling established by recent price action.
Confluence arises in oversold RSI and KDJ readings near the Bollinger Band lower boundary, hinting at a possible technical bounce. However, bearish MACD and the sustained sub-50-day SMA position suggest unresolved downward pressure. A decisive break below $338 would likely target the $313–$318 Fibonacci and moving average support cluster, while a reversal above $360 would neutralize immediate downside risks.