PTON at Crucial Support Level Ahead of Earnings!

Updated

A week ago, I posted a short idea on PTON with the Head and Shoulders pattern as my reasoning. That idea is still active, but I will be looking to this week's upcoming earnings call for confirmation of the pattern. The neckline of the pattern (~$95) is a critical support level and the earnings call will ultimately choose the direction in which the stock will proceed for the upcoming month(s). As of right now, the earnings call could go either way, but I am leaning more towards PTON falling short of expectations. If the earnings call is able to pull the price down below the neckline, then I will most likely open a short position on the stock. If the earnings call pushes the price above the right shoulder's peak, then I may or may not be looking to enter a long position. My decision on the long position will depend on how well PTON is able to resolve the issues that have risen around the country involving their treadmills.

I will update this idea with my position on this idea and stock after the earnings call on May 6, 2021 after-hours.

Note

PTON most likely closing below neckline today, but still within support zone. Will wait for earnings, as stated prior.

Note

Quick correction to my original post description:

I am leaning towards PTON beating earning expectations. What I meant to say in the original description was that missing expectations may help our Head and Shoulders pattern's confirmation, not that I think PTON will miss. Did not notice this weird phrasing till now.

This correction does not change anything-- earnings will still be the deciding factor for this pattern.

Note

PTON treadmill recall and admittance of fault pulled shares way below the neckline. I have high hopes for the pattern's confirmation by the end of today and tomorrow. Almost ready to enter a short position! Could be today or tomorrow.

Trade active

BTO PTON $95 Put Exp. 07/16/21

Trade active

Added more $95 Puts Exp. 07/16/21 to my position earlier when the price was ~$89.

Sri2Trill

Related publications

PTON 7-Month Head and Shoulders Pattern Formation

by Sri2Trill

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