Carvana (CVNA) closed 5% higher after rallying as much as 33% on Thursday. Shares of the used car platform had rallied a total of 111% over the previous five sessions.
Carvana stock has crashed back to Earth after a massive run, and these three indicators show just how bad things are.
A short squeeze occurs when short-sellers rush to cover their positions on a stock. The sudden rush of buying can quickly push a stock price higher. After a tough market year in 2022, some stocks have built up large short-seller followings, potentially priming the pump for a new wave of short squeezes.