Which button to press first? Press it in the correct sequence and at the right moment and $$$ will fall from the sky. Press it in the wrong sequence and at the wrong moment and you will weep and gnash your teeth in despair.
No one knows but it reminds me of the time when Ackman called Herbalife short at $40. His rivals went against him and pushed it even higher but check it now. After years, in the best days, it is a $6 stock. Dont be surprised if worse than that happens to Carvana. In my opinion the best strategy is to sell out of the money calls or in conservative case buy puts.
Herbalife and Carvana charts are very similar (are they twins?). They have a wide range and the charts are rather trendy (not messy). It is the traders' dream.
https://finance.yahoo.com/news/carvana-extends-loan-sale-deal-165421561.html (Bloomberg) -- Carvana Co. said it has reestablished an agreement with Ally Financial Inc. to sell the lender up to $4 billion in used-vehicle loan receivables...
If anything you should be short. Carvana's Profit Margin is 0.14% and Operating Margin is 9.25%. There's very little in the way of barriers to entry. Most dealerships make money from parts and service, so perhaps a 30x EV/EBITDA is not that attractive.
This applies to all pumped stocks. 1- Stock is quiet for a period of time 2- It starts to rally for no reasn (pump) 3- Some analytists upgrate it and also the company come with some bloated results 4- Now many traders are talking about it and some go long and some plan to go short 5- shorts get burnt and this causes short squeeze and rally more 6- Reports come out about the company cooking numbers 7- Stock drops sharp 8- Some analysts come to rescue and stock starts to rally again (short squeeze) 9- Big investors start to pull out as they feel the danger. Small investors might get in at this phase 10- Stock tops and starts to crack again 11- You might see some head and shoulder in the chart but the downtrend will continue 12- Company's result will prove that things were not really good. 13- Stock is down in the drain 14- Stock is forgotten For Carvava, we are at stage 8.
Reminds of all the hyped vaccine stocks and other SPACs during the April 2020 - Summer 2021 era. My memory is that if you bought any IPO that gapped more than 15-20% at the open it almost always kept going higher. The only exceptions I think were ABNB & RIVN. They went higher but not that much.