Think Peloton ($PTON) is on a good path? Me too. – August 24, 2022
PTON
I want to look at Peloton ( NASDAQ: PTON ) today. Now, this was a classic pullback buy opportunity. However, I wouldn’t have done it, you would have had to be really aggressive to buy this yesterday just because the stock was still trickling lower. A series of lower lows, and lower highs as well, irrespective of this thing on Monday where the stock closed higher than the open, it was the first time it had been done that in a while.
But we were still seeing, that there is a high, and then every single day here the highs were lower, meaning, even as the price declined there were more sellers today than there were yesterday. There just wasn’t enough buying to push this stock higher than the prior day. And you can also see the same thing on the downside.
Each intraday low was lower than the prior day, so sellers were still more aggressive than buyers. Now, you could say, well yes, but what about it was very close to the 50-day moving average? Alright, fine. Well, shoot, the stock closed here, it’s almost 7 percent above the 50-day moving average, I’m not going to do that.
I would rather see whether the stock pulled back one more day. Because it’s been doing it for how many days in a row, do I have the ability to prognosticate? I am not Dennis Gartman, I can’t do that. So I have to wait for an appropriate action.
What would have been nice is, if we got some kind of pattern like this, even this. But if we had some kind of move here where the stock traded lower but then had a stronger close, had a higher close, maybe on heavier volume, that type of thing. That would have been kind of a low-risk, higher probability entry, but we didn’t get that.
And so then, boom, along comes the news this morning, that Peloton ( NASDAQ: PTON ) is going to start selling some of its crap on Amazon ( NASDAQ: AMZN ), and that is always a big deal. So what does the stock do? It was up, I think it was 8 percent premarket, something like that. It was kind of 8, 8.5 percent. The stock did trade a little bit lower, slightly, but then it just started running up.
I took this for a trade, I know some of our members did too. I held it for less than half an hour, even though the stock kept moving higher. I had stuff to do and I didn’t want to watch it. So I made a little bit of money, I sold, I think a little below 13.25 or so. Again, there was more money to be made but I just didn’t see the upside in it, versus closing it down, saying, thank you very much, sir, may I have another? And then moving on with my day.
But this is the thing that I wanted to mention, this idea, where this is trailing down like this, then you’ve got this cap at $14.00. I don’t really think this applies too much right now. Not on this because the news has changed. Also, this, right now, is trading, it’s like everybody who bought down here was still holding, they’re winners.
So there are only very few people, let’s say I am trying to draw the top here, between here and here. So the most that anybody is down are the top tickers at 6.35 and they are now a heck of a lot better than they were just yesterday.
So what I am pointing out is, that there really isn’t much resistance. I am looking at this only as a technical area where people might want to sell because it’s an even number as opposed to a physiological level, where this is where everybody bought and everybody is upside down, they are puking and they just want to get out of their stock.
I don’t really see that happening. I would actually look for more upside here. I would look for this as kind of the line in the sand, I will say $14.00. If this stock rallies above $14.00 you are probably going to see a really nice continuation move. I am not even looking at fundamentals, I’m sure they suck, all of that stuff, I am just looking at the price chart.
So if you bought this stock today for anything other than a day trade, which was my deal, then I think you still hold this stock, I think the stock is working out well.
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