We looked at PTON back on September 30 and concluded that, "PTON has been in an uptrend from April and has risen about four-fold. The marketplace has already discounted a lot of good news on PTON, in my opinion. I continue the view that this is not the right time for a long position on PTON."
In this daily Japanese candlestick chart of PTON, below, we can see that the price of PTON rallied about $40 more into a mid-October high before giving back all the gains from late September. Trading volume was heavy in early November, as prices made a low after a $50 pullback. PTON has been creeping higher for about six weeks on shrinking volume. Prices are now back above the rising 50-day moving average line and more than $50 over the rising 200-day line.
The On-Balance-Volume (OBV) line has made a slight new high this month and indicates that buyers of PTON are more aggressive. The 12-day price momentum study shows a bullish divergence in November -- and only a small bearish divergence so far in December.
In this weekly Japanese candlestick chart of PTON, below, we can see a bullish engulfing pattern in early November. Prices have followed through on the upside but the candles look like small spinning tops and could mark the end of the advance at any time. The weekly OBV line has been flat and is still below its October peak. Buyers do not appear too aggressive in this timeframe. The 12-week price momentum study peaked in early October.
In this Point and Figure chart of PTON, below, we used daily price data. Here the chart suggests an upside price target of $161. A decline back below $116 is likely to weaken the picture.
Bottom line strategy: The background story of PTON appears positive but the charts and indicators do not give me a "jump back in" story just yet. I remain cautious for now.