Peloton Interactive (PTON) shares were falling about 8% earlier Friday, after the fitness company reported a wider-than-expected fourth-quarter loss, issued a revenue outlook below estimates, and slashed the price of its most-popular bike.
Let's check and see how the charts are looking now.
In this daily bar chart of PTON, below, we can see that the price of PTON has been rolling over the past three months. Prices could not stay above the cresting 200-day moving average line for too long and this month we can see that prices stalled at the underside of the 200-day line.
The On-Balance-Volume (OBV) line has been slowly weakening from early June and telling us that sellers of PTON have been more aggressive with heavier trading volume being transacted on days when the stock closed lower. The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line in sell territory.
In this weekly Japanese candlestick chart of PTON, below, we can see a number of upper shadows in June and July that tell us that traders and investors were rejecting the price gains. The latest candle shows another upper shadow that stopped at the underside of the cresting 40-week moving average line.
The weekly OBV line has been neutral the past four months. The MACD oscillator is hugging the zero line.
In this daily Point and Figure chart of PTON, below, we can see an upside price target. A trade at $104 or lower is likely to generate a downside price target.
In this weekly Point and Figure chart of PTON, below, we can see a downside price target in the $85 area.
Bottom line strategy: The charts and indicators for PTON were weakening before Friday so I would not be a buyer of weakness. Avoid the long side of PTON.
