Carvana Co. (NYSE: CVNA) continues to show a constructive long-term Elliott Wave structure following the major decline that ended near the 2023 low. From that bottom, the stock developed a strong impulsive advance with multiple internal five-wave structures, supporting the broader bullish outlook. Based on the current chart structure, Carvana appears to have completed a larger wave I near the early 2026 high around $98.95. The stock has since entered a corrective phase labeled wave II. The correction appears to be unfolding as a complex W-X-Y structure. Wave W developed as the initial decline from the wave I peak. Price then formed an X-wave recovery before turning lower again. The current structure suggests that the final wave Y decline may still need to develop before the larger correction reaches completion.
Our preferred Elliott Wave scenario expects wave II to target the $41.01 area. This level represents the 100% Fibonacci relationship and could provide an important support zone for the correction to end. The chart also shows a deeper Fibonacci projection near $14.45, representing the 1.618 extension. However, our preferred scenario remains a termination near $41.01, provided the current structure continues to develop as expected.
Wave II Could Set Up the Next Major Rally
Once wave II completes, we expect Carvana to turn higher and begin the next impulsive advance. The projected structure suggests an initial recovery from the $41.01 area, followed by stronger upside that could eventually take CVNA toward new all-time highs. Therefore, we do not recommend selling into the current weakness. Instead, investors should monitor the development of the W-X-Y correction and watch the $41.01 region for signs of a completed wave II.
A confirmed bullish reversal from this area could provide a high-probability opportunity to participate in the next major upside phase. As long as the larger Elliott Wave structure remains valid, the long-term outlook for Carvana stays bullish, with the potential for significant upside after wave II concludes.
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