CVNA, like many other stocks that sold off last week, looks like a good buying opportunity on the daily chart. Switch to the monthly and you see the 10ema - the 10, not even the 20! - is still down around 220. That just goes to show how fast stocks shot up and how far they moved away from the averages.
Option volumes are slim to none on this stock but if the price moves then the return is still excellent. So while the bid/ask spread is terribly large, if stock price moves enough your option will gain plenty of value that you can sell your put on the lower end of the spread and still have a great return. Here you can see the red daily trendline has also been broken.
On the daily chart, RSI is below 50. I like to use the hourly charts during big moves to help clarify trends and levels. I do not yet see bullish divergence on the 60m chart. Price could turn lower from this 260 area, holding 10ema as resistance, or it could move up to 20sma before pulling back. I am watching for RSI to stay under 50 and for price to get under 258.
Be choosy about your entry, for example on a test of the 20sma, or after a trigger on your lower timeframe chart, and use small position size so you can trade comfortably (without worry).
Option volumes are slim to none on this stock but if the price moves then the return is still excellent. So while the bid/ask spread is terribly large, if stock price moves enough your option will gain plenty of value that you can sell your put on the lower end of the spread and still have a great return. Here you can see the red daily trendline has also been broken.
On the daily chart, RSI is below 50. I like to use the hourly charts during big moves to help clarify trends and levels. I do not yet see bullish divergence on the 60m chart. Price could turn lower from this 260 area, holding 10ema as resistance, or it could move up to 20sma before pulling back. I am watching for RSI to stay under 50 and for price to get under 258.
Be choosy about your entry, for example on a test of the 20sma, or after a trigger on your lower timeframe chart, and use small position size so you can trade comfortably (without worry).