The "Lightning Round" segment of Mad Money is a viewer favorite where callers get to ask Jim Cramer about companies they are interested in. Thursday night a caller asked about Peloton Interactive (PTON) : "I think this one has run up way too far," commented Cramer.
Let's check out the charts.
In this daily bar chart of PTON, below, we can see that prices rallied about four-fold from last year. Prices are trading above the rising 50-day moving average line but are likely to be considered extended or overbought versus the rising 200-day moving average line which intersects below $45 now.
The trading volume has been heavy this month but the On-Balance-Volume (OBV) line has weakened. This tells us that someone was using the active volume to be a more aggressive seller and this could be a movement from stronger hands to weaker hands.
The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal.
In this weekly Japanese candlestick chart, below, we have a mixed picture. Prices are in an uptrend above the rising 40-week moving average line but we cannot ignore the large upper shadows in recent weeks above $80 and $85. This tells us that traders rejected the highs as prices closed well off their best levels.
In this daily Point and Figure chart of PTON, below, we can see a potential downside price target in the $60-$59 area.
Bottom line strategy: Shares of PTON have had a great ride to the upside but now it looks like it is time to get off both the bike and the stock.
