Check out this Bike Seat Pattern on $PTON – February 21, 2023

by DAN PTON 
This is Scott with your Chart of the Day. I want to take a look at Peloton ( NASDAQ: PTON ). Now, I haven’t looked at Peloton ( NASDAQ: PTON ) for a while, and for good reason, because it has been in a very strong downtrend since well before the market even broke down.

This really started to break down here around August or September of 2021. It got rejected at the 200-day moving average and then it’s been an easy trade for the shorts for the most part. Yes, you got little whips here and there but still, a massive trade to the downside.

Now recently, it has gotten back above all the major moving averages on a potential short squeeze higher. You can see that based on the volume here. I don’t think anyone was buying a lot of Pelotons ( NASDAQ: PTON ) on February 1st to increase their fitness. This was probably short covering as it did make a daily higher high above this clear area of resistance.

It couldn’t really get above, the shorts didn’t really have a reason to cover. It tried and failed, tried and failed, tried and failed, tried and it followed through. And so a definite short covering here on Peloton ( NASDAQ: PTON ). Now most recently you can see after the short covering rally it has fallen back into just under the 21-day exponential period moving average.

If I delete this line here I can draw a bit of a wedge pattern on the chart, where we have this sharp downward-sloping trendline and then another downside-sloping trendline. And we have a little bit of a wedge, or what I am calling a Peloton bike seat pattern because it, kind of, looks like a bike seat, technical stuff here.

What I want to see from Peloton ( NASDAQ: PTON ), on the upside, is a breakthrough, out of this wedge to the upside. Anything really below 14.90, is technically a lower high, so you would want to see a higher high and then a potential backtest of this move before follow-through to the upside.

But this is definitely a pattern that short-term traders could salivate over. So if you are one of those, add Peloton ( NASDAQ: PTON ) to your watch list. It is one that I am going to be watching for some short-term trades.

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