CarLotz Breaks Out Of Downtrend And May See A Trend Change

CarLotz Inc. LOTZ shares traded higher Tuesday as retail traders push the stock up.

The stock was trending throughout the day on StockTwits as momentum from the page likely helped push the stock higher. The company also opened a new hub in Charlottesville Virginia on June 7.

CarLotz was up 24% at $6.686 at last check. Below is a technical look at the stock's chart.

CarLotz Daily Chart Analysis:

• Shares were falling the past few months in a downwards trending channel, but Tuesday, the stock saw a gap up out of the channel.
• The stock crossed above the 50-day moving average (green), and trades below the 200-day moving average (blue), indicating sentiment in the stock is becoming less bearish.
• The 50-day moving average may hold as an area of support, while the 200-day moving average may be a place where the stock finds resistance.

Key Levels To Watch:

• The stock was able to break above the resistance and out of the downward trending channel.
• The bottom of the channel had previously acted as support while the top of the channel acted as resistance. Now that the stock looks to have broken out, the top line of the channel may hold as support.
• The Relative Strength Index (RSI) saw a large move up. This means that the stock became much more overbought Tuesday. The stock hasn't entered overbought territory yet, and may continue to move up as the RSI stays high.

What’s Next?

Bullish technical traders would like to see the stock consolidate for a time before the stock may see another move. Bulls want to see the stock hold the gains it made as it consolidates.

Bearish technical traders would like to see the stock fall back into the downwards channel. If the stock fell back to the channel, the next thing that bears would like to see would be a break below the support of the channel. A break below support could cause a large dump to happen.