Shares of Pelton Interactive (PTON) will be removed from the Nasdaq 100 index on January 24. The exercise equipment company has had a run of bad news, just ask actor Chris Noth. Let's check out the charts.
In this daily bar chart of PTON, below, we used a log-scale to plot the price movement. Here we can see that prices have suffered a huge decline over the past 12 months. The gap lower in November was particularly painful. Trading volume has been heavy since early November as traders are voting with their feet.
The moving averages are bearish and the weak On-Balance-Volume (OBV) line tells us that sellers of PTON are more aggressive than buyers. The 12-day price momentum study is unfortunately not yet showing us a pattern of slowing momentum.
In this weekly Japanese candlestick chart of PTON, below, we continue to see a bearish picture. Prices have made a number of spinning tops but that has not led to a bounce or a reversal. (The spinning tops could be a function of the scale.) The 40-week moving average line is bearish.
The OBV line is pointed down and the 12-week price momentum study is not generating a bullish divergence.
In this daily Point and Figure chart of PTON, below, we can see a downside price target of $25.
In this weekly Point and Figure chart of PTON, below, we used a five box reversal filter. Here the software suggests a $24 target.
Bottom line strategy: In our November 29 review wrote, "In our November 5 review of PTON, we recommended that 'Don't fight the downtrend. Do not try to pick a bottom. Continue to avoid the long side but also continue to exercise.'" PTON might bounce to the upside a little but without a bottom formation, prices are more likely to sink still lower in the months ahead. Continue to avoid the long side." We will stick to our bearish strategy - continue to avoid the long side.
