Stock of the Day: Where is the Bottom for Carvana?

Carvana Co. (NYSE:CVNA) is consolidating Wednesday. The shares gained more than 5% yesterday after analysts at Jefferies Financial Group Inc. (NYSE:JEF) said the company’s unit sales for September were 40% above Wall Street estimates. As you can see on the chart, the $57 level has been support and Carvana is getting close to it. Stocks have a tendency to rally after reaching support. This is why Carvana is the Stock of the Day. ‘Markets have memories’ is an old saying. It refers to how an important price level can retain its importance for a long time. Carvana first found support around $57 in June 2025. A rally followed. When this happened, many of the traders and investors who sold at the support decided that selling was a mistake. A number of them also decided to buy their shares back. But they would only do so if they could eventually get them for the price they were sold at. When the shares dropped back to $57, these regretful sellers placed buy orders. There were so many of these orders that it created support. Then another rally followed, and a similar thing happened. When Carvana sold off to $57 in March, remorseful sellers placing buy orders created support again. $57 was also support in July. Sometimes stocks rally after reaching support. This happens when some of the buyers who created the support become anxious and impatient. They know that sellers will go to whoever is willing to pay the highest price. They are afraid that someone else will be willing to pay more than they are. As a result, they increase their bid prices. Other anxious buyers see this and do the same thing. This can result in a snowball effect that forces the shares into an uptrend. If Carvana gets to this important support level, there is a chance the shares bottom out again. There is also a chance of a rally following. Image: Shutterstock