Shares of Peloton Have Fallen Off the Bicycle Seat

Shares of Peloton Interactive Inc. (PTON) have dropped sharply in recent days. Let’s check out the charts and indicators to see how long of a rest period we may need. 

In the daily bar chart of PTON, below, we can see how swiftly prices have dropped in the past few days. PTON is now below the 50-day moving average line and below the 200-day moving average line. Trading volume has increased on the decline and the On-Balance-Volume (OBV) has turned lower. A declining OBV line tells us that sellers of PTON have become more aggressive.

The trend-following Moving Average Convergence Divergence (MACD) oscillator has turned to the downside for a take profits sell signal. An outright sell signal would happen when/or if the oscillator moved below the zero line.  

 

In the weekly bar chart of PTON, below, we can see some weakness in the indicators. Prices have turned lower and could test the rising 40-week moving average line before too long.

 

Trading volume has been shrinking for months and that is not a good sign. The weekly OBV line has been flat since the middle of November. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal. 

 

 

In this daily Point and Figure chart of PTON, below, we can see that prices reached a target of $114. 

 

 

 

In this weekly Point and Figure chart of PTON, below, we can see a potential downside price target in the $108 area.  

 

 

 

Bottom-line strategy: The rally in PTON stalled out in December and January and weakened significantly this month. The selloff does not appear to be over. Stand aside for now.

 

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