$CVNA noob trend analysis
Looking at the daily chart here and how the price moves in relation to previous earnings and subsequent trends created.
Observations:
1) Begin looking around earnings Aug 2020, after trading between trendlines since covid plummet in March. Beats estimates by 24% in Aug earnings and we see massive (28%) single day jump on the following day, followed by a subsequent 14% pullback the following day.
2) CVNA trades in between trendlines at a much softer angle until earnings on Oct 2020, where they beat 64%. This triggered selloffs on the three days around earnings followed by (I believe) a bull hammer at the bottom indicating a reversal into another sequence of trading between sharper positive trendlines. Gains about 60% over 43 days.
3) Seeing a triangle pattern. In true coinflip earnings fashion, price jumps out of the downward upper trendline after missing earnings -77%. Other than that this channel has continued consolidating slightly downward.
Analysis/Plays:
1) The YOLO Earnings play: Expecting an upward swing to break out of this channel like we saw with the previous earnings. This will also depend on how the big boys earnings look the previous week (4/26-4/30). Recommending what george would with a call spread for the short term. EDIT: Could see a run up into earnings at test previous resistance of 300 around the date. If you look at the hourly on last Friday we had some strong momentum on the buy side into close. This could be a precursor of the earnings run-up or some channel noise and will largely be affected by FAANG earnings next week.
2) Following that I'd expect an eventual breakout to the downside. If my analysis of the pattern is correct and we are in a triangle we could see a breakout to the downside and test previous RR support. This eventual downtrend is supported by overvaluation of the company in relation to revenues as well as consistent and increasingly frequent insider selling: https://tinyurl.c om/3xeuy3kw. EOY puts could be the play to the downside.
Observations:
1) Begin looking around earnings Aug 2020, after trading between trendlines since covid plummet in March. Beats estimates by 24% in Aug earnings and we see massive (28%) single day jump on the following day, followed by a subsequent 14% pullback the following day.
2) CVNA trades in between trendlines at a much softer angle until earnings on Oct 2020, where they beat 64%. This triggered selloffs on the three days around earnings followed by (I believe) a bull hammer at the bottom indicating a reversal into another sequence of trading between sharper positive trendlines. Gains about 60% over 43 days.
3) Seeing a triangle pattern. In true coinflip earnings fashion, price jumps out of the downward upper trendline after missing earnings -77%. Other than that this channel has continued consolidating slightly downward.
Analysis/Plays:
1) The YOLO Earnings play: Expecting an upward swing to break out of this channel like we saw with the previous earnings. This will also depend on how the big boys earnings look the previous week (4/26-4/30). Recommending what george would with a call spread for the short term. EDIT: Could see a run up into earnings at test previous resistance of 300 around the date. If you look at the hourly on last Friday we had some strong momentum on the buy side into close. This could be a precursor of the earnings run-up or some channel noise and will largely be affected by FAANG earnings next week.
2) Following that I'd expect an eventual breakout to the downside. If my analysis of the pattern is correct and we are in a triangle we could see a breakout to the downside and test previous RR support. This eventual downtrend is supported by overvaluation of the company in relation to revenues as well as consistent and increasingly frequent insider selling: https://tinyurl.c om/3xeuy3kw. EOY puts could be the play to the downside.
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