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Since bottoming out at $3.62, the stock is now up to $32.30 and could see higher highs. For one, the company recently said it now expects to achieve adjusted EBITDA above $50 million in the second quarter of 2023. Two, analysts love the stock. DA Davidson raised its price target to $18 from $7. Citi raised its target to $25 from $11.
Three, with strong consumer demand for EVs, the company just said, “Carvana offers more than 46 EV makes and models, with more than 40% of our EV options under $25,000,” said Kevin Fitzgerald, Carvana Director of Inventory Purchasing. “Carvana’s digital leadership and customer focus is poised to support more of America’s growing interest in EVs and all vehicles through our proven auto e-commerce platform for buying, selling, and trade-ins.”
We mentioned CVNA as an opportunity on June 13 here, as it traded at $23.51. It’s now up to $32.67 and accelerating.
Most stock and futures traders are familiar with approaches to option strategies that rely upon overbought or oversold levels of the underlying instrument. While it is not always easy to measure what is overbought or oversold, approaches generally use trading volume, rate of ascent (or descent) of the price of the instrument, or more exotic things such as oscillators. Option strategies can then be constructed about one's outlook for the underlying. For example, if a stock is determined to be oversold, then one would want to employ bullish strategies. These might vary from the aggressive (outright call purchases) to the moderate (bull spreads), to the basically conservative (naked put sales – the equivalent of covered call writing). Of course, the option trader should not entirely ignore the pricing structure of the options. If the options are priced unfavorably, he may want to switch strategies or he may just buy the underlying common stock and not use options at all. A futures trader would make analogous decisions. Conversely if a stock or futures contract were determined to be overbought then strategies such as put purchases (aggressive) or bear spreads (moderate) would be in order.
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The first profit opportunity we will review is in CARS, or Cars.com Inc. CARS operates an online automotive platform. The Company offers new and used vehicle listings, expert and consumer reviews, research tools and other information.
The monthly chart shows that CARS has been above the moving average line in a confirmed bull trend since October. The fourmonth pause is expected to be followed by a further advance.
The daily chart shows that CARS was very bullish from September until February. The overall trend since then has been sideways. Sideways trading in a bull trend is usually followed by a further advance.
We recommend buying CARS stock at the current price level.
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