Carvana Surges Near 52-Week High—What’s Fueling the Rally?

• Carvana (CVNA) surges 2.23% to $356.19, nearing its 52-week high of $364
• Analysts highlight CEO confidence and Jim Cramer’s bullish stance despite risks cited by The Motley Fool
• Gordon Haskett’s $329 price target and volatile insider selling add intrigue to the momentum

Today’s rally lifts CVNA to its highest level in over a year, with shares trading between $348 and $358.50 intraday. The stock’s ascent defies sector headwinds, contrasting with Carmax (KMX)’s 1.76% dip, signaling a divergence in retail auto strategies.

Analyst Coverage and CEO Confidence Ignite Momentum
The surge stems from Gordon Haskett’s initiation of coverage with a 'Hold' rating and $329 price target, validating institutional interest. Jim Cramer’s endorsement, emphasizing CEO leadership, amplified investor optimism. Despite risks cited by The Motley Fool—including Carvana’s 110x earnings multiple and reliance on ambitious sales targets—the stock’s technical strength and insider activity (e.g., Ernie Garcia’s $245M share sale) suggest a battle between growth optimism and valuation skepticism.

EV Sector Mixed as Carmax Stumbles, Carvana Soars
While Carvana rallies, Carmax (KMX) slips 1.76%, highlighting sector divergence. Used-car inventory normalization and macroeconomic uncertainty weigh on traditional retailers, whereas Carvana’s tech-driven model and EV demand tailwinds (noted in North America’s $28.6B pickup truck market report) fuel its premium. The contrast underscores a shift toward digitally native auto retailers over legacy players.

Bullish Technicals and High-Impact Options for the Surge
Technical Indicators:
• RSI: 63.24 (neutral, below overbought 70)
• Bollinger Bands: Upper at $370.26 (resistance), Middle at $330.13 (support)
• 200-Day MA: $244.02 (well below current price)
• MACD: Bullish with histogram at +0.152

CVNA’s strong momentum suggests a short-term breakout toward $364. Traders should watch $350 (100-day MA) as support. For leveraged exposure, consider the CVNX (2X Long ETF) for amplified upside. Among options:

1. CVNA20250725C355 (Call, $355 strike)
• IV: 46.01%, Leverage: 57.24%, Delta: 0.533, Theta: -1.34, Gamma: 0.0147
• High liquidity ($129,991 turnover), ideal for a $5+ price target. Payoff at $368: $13 profit vs. $355 strike.

2. CVNA20250725C360 (Call, $360 strike)
• IV: 47.19%, Leverage: 74.77%, Delta: 0.462, Theta: -1.25, Gamma: 0.0143
• Captures premium if $364 high is breached. Break-even at $361.25; payoff at $370 nets $10 profit.

Bullish traders: Buy calls above $355 with stop below $350. Cautious investors: Use CVNY (Option Income ETF) for income amid volatility. Hook: “If $364 falls, pivot to CVNA20250725P355 puts for downside protection.”

Backtest Carvana Stock Performance
Following a 2% intraday increase, the performance of CVNA was impressive, with a strategy return of 143.77% and an excess return of 59.32% compared to the benchmark return of 84.45%. The strategy achieved a CAGR of 19.61% and a maximum drawdown of 0.00%, indicating a strong risk-adjusted performance.

Hold or Bullish? Carvana’s Crossroads Ahead
Carvana’s rally faces a critical test at $364. Sustained momentum could validate its tech-driven growth thesis, but valuation risks and sector underperformance by peers like KMX (down 1.76%) demand caution. Watch for CEO leadership updates and EV adoption trends. For now, bulls target $364, while bears eye $342.50 resistance. Action: Aggressive buyers go long CVNX; cautious players wait for a pullback below $350 before committing.