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Peloton Stock: Headed Below $10 or About to Bounce? Check the Chart.

Peloton stock is down more than 90% from the high. Are more losses in store or is a big bounce coming?

Peloton  (PTON) - Get Free Report stock is like so many other growth holdings right now: toast.

The stock is down 12.5% on the day after the connected-fitness company's earnings report. That's well off the lows shortly after the open, when it was down 20%.  

The company missed on profit expectations and issued weaker-than-expected guidance.

At today’s low, Peloton stock was down 40% over the past four days. The stock is down in four straight weeks and in six of the past seven. Amid that stretch, we’ve seen a peak-to-trough decline of 60%.

From its highs, the stock is down more than 93%. 

These days even companies delivering strong results and upbeat guidance — like Advanced Micro Devices  (AMD) - Get Free Report — are seeing their share prices sink.

Is there anything bulls can do? Let's look at the chart.

Trading Peloton Stock

Weekly chart of Peloton stock.

Weekly chart of Peloton stock.

Hope is not a good strategy, particularly for growth stocks when they are in a bear market and widely out of favor.

As we look at the chart, notice how long the 10-week moving average has been resistance in this stock. That isn’t a newsflash for trend traders. The 10-week moving average went from support in the first quarter of 2021 to resistance, and that was the beginning of a new downtrend.

As for the current setup, watch today’s low and the $12.68 level. The latter is the 161.8% extension of the recent range, but it’s not much to go on.

We’re getting a decent bounce off today’s low, so if anything this would be our risk level to watch.

Peloton has been hit hard and is not a stock that many investors will feel comfortable owning. There are thousands to pick from: Why focus on the one that’s down 90%-plus from the highs? 

If a rebound is brewing, a move back to the prior all-time low at $17.70 could be in the cards. Near there, Peloton stock may very well test the 10-week moving average as well.

On the downside, a break of today’s low — and especially a close below it — opens the door down to $10 and lower.