Used Car Dealer with No Dealership? Analyze That!

The various quirks and inconveniences of dealing with an in-person car dealership experience, especially for used cars, may be a thing of the past if Carvana continues to grow.

Based in Phoenix, Carvana is an online-only used car dealer that allows customers to shop, finance, and trade in cars through their website. Beyond the intriguing business model, one our Members flagged how well the chart has been acting of late, as part of the specialty retail/consumer complex which we know has seen some nice relative outperforming issues during this harsh tech unwind. 

Since its April 2017 IPO, Carvana has spent the better part of the last year coming to terms with the low-$20s. 

As you can see on the weekly timeframe, below, however, bulls are now in control with this recent push above upper resistance of a fairly well-defined triangle pattern. 

Moreover, CVNA is one of the most heavily-shorted names in the entry market, with a low float to boot, which means shorts may very well find themselves trapped even if the broad market is corrective. That said, I would prefer to simply track Carvana closely for now until the broad market firms up just a bit more. 

Beyond the near-term market dynamics, though, CVNA is shaping up an up-and-comer, with its price action finally starting to support the underlying common sense bull thesis of an online-only used car dealership likely making for a much more pleasant consumer experience