Used Car Demand Surges, This Stock Breaks Out

For millions of consumers, the “new car dream” has suddenly hit a wall. With tariffs and higher costs driving sticker prices through the roof, buyers are flocking to the used car market in search of value—and that shift has created a powerful tailwind for the companies best positioned to meet the demand. One major player has stepped squarely into the spotlight, offering convenience, competitive pricing, and scale at a time when the market desperately needs it. Investors are noticing, as financial performance shows clear year-over-year improvement and Wall Street begins to reward the turnaround. The stock’s momentum is undeniable, the uptrend is firmly intact, and the charts suggest this breakout still has plenty of room to run.

That’s why Carvana (CVNA) has stormed onto my radar. The online used-car giant has been riding a wave of consumer demand as buyers increasingly turn to pre-owned vehicles for value in a tariff-heavy, high-cost environment. At the same time, Carvana’s own financial turnaround has been undeniable, with year-over-year improvements showing up in stronger margins and operational efficiency. Investors love this kind of story—a clear fundamental tailwind paired with real, measurable progress on the bottom line—and the charts are reflecting it. With momentum accelerating, CVNA looks like a name that’s not just moving, but has the potential to keep powering higher from here.

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What really elevates Carvana from “interesting story” to compelling trade setup is the technical backdrop. The stock is flashing one of my favorite time-tested signals—the Powertrend Buy—where the 1-Month Price pushes above the 10-Month Simple Moving Average. The crossover occurred in June ’23 and has remained intact ever since. This isn’t just noise on a chart; it’s a confirmation that buying pressure is firmly in control and the trend has the strength to sustain itself. Time and again, when a stock enters this kind of PowerTrend, it often marks the beginning of a durable, momentum-driven run. For traders looking for names where fundamentals meet technical strength, CVNA is checking all the right boxes right now.

To play this setup, I’d be looking to go long with an ITM call debit spread—a smart way to capture the upside while still building in a layer of protection. CVNA’s technicals are as strong as they come, and with momentum lining up for further gains, the medium-term path looks primed for higher prices. But here’s where it gets interesting: the stock’s options are carrying rich premiums, which actually works in our favor. By structuring a debit spread, that extra time premium translates into outsized profit potential. In fact, there’s a spread right now that could deliver a 51.5% gain if CVNA moves higher, stays flat, or even dips as much as 7.5% by expiration. That’s the kind of probability-boosted setup I want on my desk. And if you’re serious about learning how our team spots and trades opportunities like this, don’t miss your chance to grab a copy of our ‘Trade Like a Champ’ eBook—it’s packed with the same strategies we rely on every day, and right now it’s yours absolutely free. Click the image below to claim your copy right now!

Wishing You the Best in Investing Success,