Carvana
Let’s hope that Carvana (CVNA) isn’t writing checks that the body can’t pay off.
Last night’s earnings report missed on the revenue and earnings, which most would consider bad news. The stock, of course, is trading 40% higher this morning!
The reason for the jump is two-fold.
First, the company basically came out and told analysts that things were going to get better over the next year as long as the economy holds up. That’s like the sixth grader coming home and telling their parents that they promise they’ll bring home “Straight As” when they have Fs on the current grade card.
Second, the shorts sellers and analysts have been trying to take this stock down for more than a year. They’re covering positions this morning by buying the stock, a painful process for short sellers.
We’ll see what happens over the next three months, but CVNA shares are a trader’s delight with their 40% year-to-date returns. We’re going to see more buying.
Intuitive Machines
We landed on the moon again… Well, a private sector company landed on the moon.
Shares of Intuitive Machines (LUNR) are 17% higher this morning after the company successfully landed on the moon yesterday. The stock made an anticipatory moon shot – I’m sorry, I couldn’t resist – above $12.50 on Wednesday as speculators crowded into the stock.
Traders took profits yesterday, dropping the stock to almost $8, but we’re looking at a situation where the price is trying to hold above $10 now.
I talk about psychological levels a lot because they’re important. $10 is one of the big ones. Keep your eye on this price as the stock is likely to shoot to $15 if it can sustain its price above $10 next week.
Rivian
Shares of EV manufacturer Rivian (RIVN) are trading another 8% lower this morning, as the stock continues to suffer from its latest earnings report.
Wednesday’s report was just terrible, and the market is making the stock pay to the tune of 33% of its value since Wednesday’s close. But wait… there’s going to be more.
Analysts loved RIVN stock heading into Wednesday’s report with 15 of the 21 analysts covering the stock rating it a buy or strong buy. We’re going to see those numbers drop over the next few weeks as Wall Street reassesses their outlook.
I just said something about the psychological value of $10, Rivian will find support there, likely rally to $12, and then reverse again and make its way to $8 as Wall Street clears their desks and portfolios of Rivian.
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About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.