Peloton Keeps On Rolling

Ed Ponsi

  • The number of active cases of Coronavirus is still rising in the U.S. 
  • Many fitness centers are reopening at reduced capacity. 
  • Peloton products can be used to create a home fitness center.

It was just a few months ago that Peloton (PTON), which manufactures exercise equipment, was widely mocked over an advertisement for an expensive stationary bike. 

That seemingly negative publicity gave the company a major boost in brand awareness. Then the pandemic hit, and suddenly Peloton products were in high demand.  

What does the future hold for this stock? Let's go to the chart to find out. 

Peloton has just broken out of an ascending triangle formation (black dotted lines). This bullish pattern projects the stock to the $70 area. 

PTON

The only thing I don't like about this chart is the lack of volume on the breakout (bottom right). Ideally, you'd like to see an increase in volume as the stock breaks to new highs.  

What could go wrong? PTON is already up 92% this year, and it's only June. At some point, demand for Peloton's products is likely to decline. 

Earlier today, Stifel raised its price target for PTON to $62. I'll go with $70. Let's see who gets it right. 

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