That action came after the Nasdaq fell more than 1% and with the S&P 500 under pressure. Seeing that type of relative strength vs. the indexes is an encouraging sign for bulls.
The relative strength goes beyond one day’s worth of action, too. While the market has been swooning this month, Pinterest has been holding up pretty well.
For instance, late last week and on Monday, as the market was making new lows, Pinterest continued to hold its 20-day moving average. That led to Tuesday’s action, where the stock broke out to new all-time highs.
The move sent shares north of $39.74, the prior all-time high from Sept. 2. All of this action has progressed from the 36.1% one-day rally in late July, which came after Pinterest’s better-than-expected earnings.
Trading Pinterest Stock
After the surge higher on earnings, Pinterest stock settled in a somewhat wide but well-defined training range between $32 and $38.
The stock finished strong on Wednesday, closing above $40 and the prior high, ending the session just a few cents below the day’s high.
Wednesday morning offered investors another opportunity with Pinterest. Shares traded lower in the opening minutes of the day, tagging the prior all-time high from earlier this month.
So now what: How does Pinterest get to $50 from here?
The company has a lot working in its favor. It’s still churning out respectable revenue growth, is swinging from breakeven operations to profitability and has no debt vs. $1.7 billion in cash. On top of that, the technicals are working in bulls’ favor.
If shares continue higher, look for a move toward the two-times range extension at $44.40. Above that and $50 is on the table, followed by the 261.8% extension at $55.
With the fundamentals, technicals and secular tailwinds working in Pinterest’s favor, a move to $50-plus is more than doable. However, it will likely need the overall market to hold up as well.
On the downside, bulls will maintain control of Pinterest if the stock holds up over the prior high near $39.60 and prior range resistance at $38. Below these levels and the 20-day moving average will change the tune though, putting range support and the 50-day moving average in play.