Peloton ‘is growing real strong’: Trader analyses PTON ahead of earnings
Peloton is set to announce its earnings report after the bell on Wednesday with investors expecting strong results from the company. Brian Shannon, www.alphatrends.net CMT and Founder, joins The Final Round to break down what can be expected.
Video Transcript
- Time now to talk to our old friend of the program, Brian Shannon. He is the founder of alphatrends.net. And Brian, we're going to talk about one of these at-home trades, the Peloton trade. We've seen that stock perform quite well. They're due out with results later this week. Walk us through what you're seeing on the chart here.
BRIAN SHANNON: Right. Where's Brian Sozzi? He's a big fan of this, right? And didn't he convince you to buy one, I think I read?
- If I had the space, I would have one. That's right.
BRIAN SHANNON: OK. Well, you know, they've-- this last week, just in the last couple of days, were up about 12% or so. And they do have earnings after the close tomorrow. Typically, you know, they're growing real strong. It's been a hot IPO. We had a little bit of issue. But we're very close to all-time highs here. And I think if you're a short term holder, it might be a case of, you know, potentially buy the rumor, sell the news.
So maybe take a little bit off before the close tomorrow on some of this continued strength. Otherwise, if we get kind of a little bit of a shock in the stock, we might see it come down towards a 31 level, which is the volume weighted average price since they came public.
- And I guess, Brian, thinking more broadly about some of the at-home trades, and just the trades that have worked, frankly, we talked about big cap tech at the start of the show. Just from a technical perspective, as you see the market, obviously, pretty much everything broke during the month of March. And we had this big snapback.
When you look around it at names that are interesting to you, or just at the level of the index, from a technical perspective, is there more that you can start to make sense of now? Like, our moving average is meaningful once again, because, you know, March is kind of out the window. Are things normalizing in your world?
BRIAN SHANNON: I don't think they've quite normalized yet, Myles. I mean, we're coming up on the 200-day moving averages in the S&P 500. That's just up at 300 on the spy. And here we are 288-- 286, I guess. You know, for me, it's more about it's still kind of normalized if you consider the timeframe, meaning if you're looking at, for instance, 30-minute candles versus daily candles.
You can start to see those ebbs and flow a lot cleaner in there. But the daily charts are just, you know, they continue to be a mess. But there is some overall structure. I mean, last week's high came pretty much exactly the 61% retracement of the 2020 high to the 2020 low. And now we're just kind of chopping around here, absorbing earnings it seems, and seeing what stocks want to do on an individual basis first.
- And I guess I'll finish this way, Brian. Conceptually, would you prefer just to see maybe the S&P shopped for a little bit, rather than move up or down 15% in a week? Is that something that's going to be more constructive in actually figuring out why there's a reason for the market to go up or down from a given point in time?
BRIAN SHANNON: Yeah, I think it would be actually fairly constructive if we saw a combination of that, some kind of pullback in price action, as well as a time correction. That would help, you know, kind of just rebuild some bases and put the stocks in stronger hands. If we see a sudden shakeout again, then that's really going to mess with the psychology and leave it in a more vulnerable position for a lot further volatility going forward.
- All right, Brian Shannon with Alphatrends.net. Always good to talk to you. Stay safe, and we'll talk soon.
BRIAN SHANNON: You too, thanks Myles.
