PTON Peloton Weekly Chart; Parabolic Price Move; Overbot; Negative Divergence Developing; Upper Band Violation

Peloton is cycling higher. Go Peloton's! Where's Peloton Girl? Keystone has posted the PTON chart a couple times this year. A short trade worked a couple months ago and then the idea was to wait for the MACD to negatively diverge on the weekly chart to know the multi-week top is in. Until then, it is a no-touch. Over the last month, price goes parabolic. That's why you always have to wait for all the chart indicators to go neggie d before you know the top is in. The bulls are enjoying big gains.

The further strength in the stock sends the RSI and histogram higher so the party rages on. Keystone's 80/20 Rule says 8's seek 2's so the breach of the 70-80 level was key and hinted that 120-130 was likely. Once PTON started higher, shorts panic and cover creating a further bid and more shorts panicking. Also, the earnings are better than expected and there were more people signing up but that may have had something to do with other family members becoming interested.

Keystone opined last year if Peloton would become a cult stock like TSLA. It looks like the jury has returned the verdict which is yes. A lot of investors believe in the stock. There are only three distribution weeks this year and look at all that insane buying the last couple months; its under accumulation. Why would anyone buy a $4K stationary bicycle and pay $60 a month that turns into a clothes hanger in three months when they can go to Walmart and buy a $100 stationary bike and use that as a clothes hanger in the master bedroom?

It's comical. At least with Tesla, it is a useful automobile and you can see how it would have sales well into the future. The sales may not be what investors expect but that is another story. With Peloton, that has to be a finite consumer audience. First, folks that actually want to get in shape would be interested, not the stereotypical potato chip-eating, beer-swigging, belly-scratching American. Then you have to have the big bucks for all this fancy whiz-bang gadgetry; a computer screen that will probably malfunction at some point. Aside from the high-cost and desire for men to look chiseled like Chuck Norris (he hawks a different exercise product) and ladies to have the body of Peloton Girl from last year's television ad, you have to have a big house to position fancy exercise equipment. Uncle Frank and his friend Louise could not fit a Peloton into their double-wide. Emma, that wants to get into shape, does not want to lug the bicycle up five flights of stairs to her small apartment in the Bronx and then carry it around each time she moves.

The investment houses believe they know more and expect everyone and his bro to own a Peloton. Ned Williams, that lives in a cottage in a senior living community with a central clubhouse, is thinking of buying a Peloton so the kids and grandchildren visit more. Ned thinks if he places stuff in boxes and piles those higher, he may be able to squeeze the Peloton between the furnace door and litter box. Ned has to put off his purchase though since he neither has the up front capital cost or the money to pay a monthly fee. The Peloton cost seems out of reach for many people and you wonder how long until the novelty wears off of having some overweight teacher yelling at you to peddle faster.

The RSI will be cooked over the next week. Watch the histo and MACD to see when they roll over when price makes another high, perhaps two weeks out. When all the indicators go neggie d which will likely be between now and early November, a multi-week down move will begin for Peloton. The 70-90 range would be a downside target say for Nov-Jan but give it a week or so to see if that MACD goes neggie d. Wait until you see the white of its eyes. It is getting very close. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Tuesday Morning, 10/20/20: CNBC business television commentator Jim Cramer says PTON, NFLX, ZM, ROKU, PYPL, TSLA and SQ will all move higher until the coronavirus pandemic is brought under control. That is a gutsy call saying these stocks will continue moving higher for the next few months.