However, shares have since backed off that high, now up just 1%. The volatile rally comes as the company is set to report earnings after the close of trading Thursday.
Peloton has been scorching hot over these last few months. The work-from-home theme has transcended office cubicles, impacting gym-goers and the entertainment industry, among others.
As a result, Peloton shares have soared more than 450% from the March low to today’s high. What can Peloton do on earnings?
Trading Peloton Earnings
On Monday, shares corrected down toward the 20-day moving average and near the breakout area between $70 and $72.50. This zone acted as support, as Peloton stock bounced and closed significantly higher on the day, near $80.
Positive news regarding Peloton’s new products and excitement ahead of what many expect to be strong earnings also helped give the stock a boost this week.
Now we’re at a tough spot. I don’t like when names burst higher and run hard into a big public event. It sets the stage for a potential sell-the-news reaction.
The stock’s being rejected from the 423.6% extension, which is just above today’s high at $99.54 and the psychologically relevant level of $100.
On the upside, bulls will want to see Peloton stock clear these marks and close above them. If it can do so, it unlocks even more upside potential, possibly putting $110 and $121 in play down the road.
My concern is on the downside. While it was likely a great quarter, investors have some lofty expectations. On a post-earnings dip, let’s see how that $70 to $72.50 area holds up, along with the 20-day moving average.
If this zone holds, it will leave bulls in control, as the trend will be intact. Below this area will put the 261.8% extension and the 50-day moving average on the table.
Should we get a larger post-earnings pullback and a market-wide correction, $50 could eventually be in play for Peloton stock. That level was a notable breakout mark in June and also comes into play near the 161.8% extension.