From my previous post on CVNA, you can see that I have an overall bearish outlook on the stock due to a dubious earnings report last week and a share offering that could add 35m shares to the float.
I have been watching the 2hr chart closely, which shows that we could be in for a large drop soon followed by a downtrend. This is best illustrated by looking at PVI/NVI to help put current events into context.
On the 2hr Chart, NVI flipped positive on June 8th which signified the beginning of the impressive short squeeze. After last week's earnings report, however, you can see that NVI has been moving downwards and flipped below the MA today on the 2hr and 4hr charts. On the other hand, PVI has been riding well above the MA since early May and has been mostly flat for the past week.
Since CVNA started to release shares, it appears as though institutions have been trying to quietly offload them to the exchange without triggering a massive selloff. So far it appears to have been working, as the price has hovered around $45 support.
Things could be changing though. Although short interest is declining and volume is decreasing, dilution and the poor state of the company are forcing institutions to sell. It looks like they're trying to keep the price near current levels. Time may be running out though and I think if the price moves past Monday's lows we could see a massive sell off.
I'm also watching closely for Aroon to cross on the 4hr chart to mark the start of a big drop.
I have been watching the 2hr chart closely, which shows that we could be in for a large drop soon followed by a downtrend. This is best illustrated by looking at PVI/NVI to help put current events into context.
On the 2hr Chart, NVI flipped positive on June 8th which signified the beginning of the impressive short squeeze. After last week's earnings report, however, you can see that NVI has been moving downwards and flipped below the MA today on the 2hr and 4hr charts. On the other hand, PVI has been riding well above the MA since early May and has been mostly flat for the past week.
Since CVNA started to release shares, it appears as though institutions have been trying to quietly offload them to the exchange without triggering a massive selloff. So far it appears to have been working, as the price has hovered around $45 support.
Things could be changing though. Although short interest is declining and volume is decreasing, dilution and the poor state of the company are forcing institutions to sell. It looks like they're trying to keep the price near current levels. Time may be running out though and I think if the price moves past Monday's lows we could see a massive sell off.
I'm also watching closely for Aroon to cross on the 4hr chart to mark the start of a big drop.