Jim Cramer told his Mad Money viewers Thursday evening that there is a bull market in fitness afoot as people look to lose their pandemic pounds. Cramer looked at four different ways to play the trend.
First up was connected fitness giant Peloton (PTON) which was a huge COVID winner in 2020, that has now become a battleground stock in 2021. With shares off 21% for the year, Cramer said he's avoiding this one.
Next was Planet Fitness (PLNT) , the low-cost, no-judgement fitness center that's picking up customers from the 17% of gyms that closed during the pandemic. Cramer remains a fan.
Then there's F45 Training (FXLV) , the fitness club for hardcore athletes that's backed by Mark Wahlberg. With 1,800 locations and more on the way, Cramer said he likes the financials and the same-store sales growth.
Finally, there's Xponential Fitness, which is coming public today.
Personally, I joined my local Orange Fitness Theory last month to get in shape but let's take a look at Planet Fitness.
In this daily bar chart of PLNT, below, we can see that prices have declined from the middle of April. Prices are trading below the declining 50-day moving average line and below the still rising 200-day moving average line. The 50-day line has crossed below the 200-day line for a dead or death cross of these two indicators. This sell signal comes well off the top and may be the wrong signal to pay attention to.
The On-Balance-Volume (OBV) line shows a slow decline from late February. The 12-day price momentum study shows higher lows from May to July telling us that the pace of the decline is slowing. This is a bullish divergence as prices decline while the indicator improves. This setup can foreshadow a recovery in price.
In this weekly Japanese candlestick chart of PLNT, below, we can see a potential hammer bottom reversal pattern - notice the long lower shadow? A bullish candlestick pattern this coming week is needed for confirmation.
The weekly OBV line shows weakness from April but there is a hint of improvement at the beginning of July. The MACD oscillator is pointed down but still just above the zero line and narrowing.
In this daily Point and Figure chart of PLNT, below, we can see a possible downside price target of $64 but a trade at $68 is needed to refresh the downtrend.
In this weekly Point and Figure chart of PLNT, below, we used close only prices and here a $62 price target can be seen.
Bottom line strategy: PLNT is still in a downtrend but momentum has been slowing, but a couple closes above $75 should inspire further gains. Aggressive traders could go long PLNT on strength above $76 risking to $68.
