Carvana (CVNA) bearish case for a 50% drop

Carvana Co (NYSE: CVNA) soared over 13,000% in three years, capturing the market’s attention. However, financial markets never move in straight lines. In this article, we delve into the Elliott Wave analysis. Our study uncovers the current pullback and the next potential investment opportunity.

Elliott Wave analysis

Despite its 98% correction in 2022, CVNA recovered fully and broke to new all-time highs. The stock created an impulsive five-wave advance from the wave ((II)) low of $3.62. This rally surged over 13,000%, completing wave (I) at $486. Most importantly, CVNA established a bullish sequence. It shows three swings into new highs since its IPO. This confirms strong bullish momentum.

Subsequently, CVNA now needs to correct this entire rally within wave (I). Therefore, the stock should pull back toward the $245 – $188 Fibonacci zone. This area represents the 50% – 61.8% retracement. A higher low should form there. Then, wave (III) will begin its next advance.

This current correction will attract long-term investors. It will unfold as a 3, 7, or 11-swing pattern, depending on the daily structure.

CVNA weekly chart 3.9.2026

Conclusion

The long term bullish cycle for CVNA remains in progress, presenting opportunities to buy the current weekly pullback using our Elliott Wave strategy. The preferred approach is to enter positions after the stock completes a 3, 7, or 11 swing sequence from its peak. Additionally, utilizing our extreme Blue Box system refines entry points, providing clarity and precision in trading decisions. Explore our system to gain deeper insights into this methodology.