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Hit & Run Subscribers Hit Pay Dirt, Short PTON Into Earnings

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The following PTON weekly shows it declined more than 50% from early January to May.

From there it retraced, turning its 3 Week Chart back up (with 3 consecutive higher weekly highs) into late June.

The 3 Week Chart turned down on the week of 8/16… and PTON continued lower, suggesting that the late June peak was a droop right shoulder of a bearish Head & Shoulder pattern.

On the week of September 6, PTON rallied to backtest its 50 week moving average –ultimately dropping down to test the May low in early October.

From there, PTON rallied into the weekly Minus One/Plus Two Sell position last week.

This is because the 3 Week Chart was pointing down (Minus One) followed by two consecutive higher weekly highs (Plus Two).

Note: these are not on a closing basis, but on an intraweek basis.

At the same time, October’s rally traced out what looked like the handle of an inverse Cup & Handle.

Taken together:

1) PTON was in a weak position below its 200 day moving average (which ties to the 50 wk ma).

2) It showed a big picture Head & Shoulders

3) It also sported a possible inverse Cup & Handle

This is a game of probabilities and the set up warranted a short position in front of PTON reporting after Thursday’s bell.

It paid off.

PTON plunged 28 points.

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