Carvana Accelerates as CarMax Stalls. What Happens to the Stocks Next, According to Charts

Vehicles are seen on a display at a Carvana dealership in Austin, Tex. (Brandon Bell/Getty Images)

Key Points

• Carvana shares have gained 8% since July, while CarMax declined 27% over the same period.
• CarMax is more than 50% below its 52-week peak of $90 and 46% below its early April lows.
• Technically, the picture remains disconcerting for CarMax, with shares below downward-sloping moving-day averages.

The divergence in the used-car industry has become increasingly pronounced, creating a compelling long/short opportunity. On one side, Carvana continues to defy expectations, delivering consistent operational strength as its digital-first model gains traction. On the other, traditional dealer CarMax faces mounting headwinds from slowing unit volumes and margin compression.

Carvana shares have gained 8% since July, contrasting sharply with CarMax’s 27% decline over the same three-month period. The trade setup favors a long position in Carvana against a short in CarMax, seeking to capture the secular shift toward online auto retailing and the widening gap in earnings momentum between the two companies. To reinforce this thesis, let’s examine the contrasting technical profiles of both stocks over the past year.

Carvana remains one of the best-performing names in the used-car space, up almost 80% year to date despite stalling over the past month (a 1% drop) and dropping 11% on Oct. 22. The stock displayed notable relative strength last week, gaining 5% versus a modest 0.9% advance for the broader . From a technical perspective, round-number theory has come into play, with shares moving between $300 and $400 since breaking above $300 on May 14. A bearish doji formed on July 31 at all-time highs near $400, coinciding with its latest earnings release, marking the start of a retracement toward the $300 area. Notably, the stock printed a bullish piercing-line candle on Oct. 23, and now the right side of a double-bottom pattern is in place. One could look to enter here, adding above a $401.10 breakout trigger, and remain constructive while the stock holds above $325. A measured move from the current base targets $500 by mid-2026. Carvana will report earnings Wednesday after the close.

Carvana traded around $368 Tuesday.

Carvana stock is consolidating between the round $300-$400 numbers, a bullish indicator.

While Carvana trades near its all-time highs, CarMax continues to struggle, now more than 50% below its 52-week peak set at the very round $90 level late last year. Not surprisingly, it recorded a bearish filled in candle at $90 on Dec. 19 after reporting earnings. Even as most equities have surged off the Liberation Day lows, CarMax is still 46% below its early April lows, underscoring persistent relative weakness.

The stock’s challenges extend beyond the recent quarter, as it has posted consecutive weekly gains only five times in 2025. Technically, the picture remains concerning. Shares sit well beneath both the downward-sloping 50- and 200-day simple moving averages and have shown no meaningful recovery since plunging 20% on Sept. 5. The resulting bear flag pattern suggests continued downside risk, as these formations typically resolve in the direction of the prevailing trend. A break below $42 could trigger another leg lower, with a measured move target near $26.

CarMax was trading around $44.50 Thursday.

CarMax technicals are showing glaring weakness in an overall strong market—a red flag.

The widening gap between Carvana’s momentum and CarMax’s stagnation illustrates where investor confidence is migrating in the used-car landscape.

Write to Doug Busch at douglas.busch@barrons.com