Signal Says Peloton Stock Could Ride Toward New Record

The equity is already up 350% year-over-year

Digital Content Manager
Nov 2, 2020 at 3:14 PM
facebook twitter linkedin

The shares of Peloton Interactive Inc (NASDAQ:PTON) are up 1.8% at $112.20 at last check today. And while the at-home exercise company has been cooling down from its Oct. 16 all-time-high of $139.75, it still sports a jaw-dropping 350% year-over-year lead. Better yet, the stock's recent pullback has it near a historically bullish trendline, which could push PTON even higher in the near future. 

More specifically, Peloton stock just came within one standard deviation of its 40-day moving average, after spending the past several months above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, only one similar signal has occurred during the past three years. The equity enjoyed a 30.6% gain following this last signal. From its current perch, a move of similar magnitude would put PTON above the $146 mark -- a brand new record high. 

PTON 40 Day 2

A short squeeze could create even more tailwinds for the security. Short interest rose 40% during the last two reporting periods, and the 14.77 million shares sold short  make up a substantial 6.1% of the stock's available float.

An unwinding of pessimism in the options pits could also boost Peloton stock. This is per the equity's 10-day put/call volume ratio of 1.21 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 97th percentile of its annual range. This suggests a healthier-than-usual appetite for bearish bets of late.

Lastly, the security's Schaeffer's Volatility Scorecard (SVS) ranks relatively high at 79 out of 100, meaning PTON has tended to exceed these expectations during the past year -- a boon for premium buyers.

Grab your FREE Eternal Contrarian report!


Special Offers from Schaeffer's Trading Partners