Peloton Stock Price Levels to Watch After Upbeat Earnings, Naming of New CEO

Key Takeaways

• Peloton shares were down sharply Friday, giving back a chunk of the near-30% gain recorded yesterday after the fitness equipment maker announced a new CEO and reported better-than-expected results.
• The stock has trended higher after forming a double bottom, with the price staging a breakaway gap yesterday following the company’s upbeat earnings. However the relative strength index warns of extremely overbought conditions
• Investors should watch important resistance levels on Peloton’s chart around $9.50 and $13, while monitoring key support levels near $6.70 and $5.

Shares in Peloton Interactive (PTON) were down sharply Friday, giving back a chunk of the near-30% gain recorded yesterday after the fitness equipment maker announced a new chief executive officer and reported better-than-expected quarterly results.

The company said it had appointed Ford (F) and former Apple (AAPL) executive Peter Stern as its new CEO. Stern currently heads the legacy automakers’ digital business services, and while at Apple, oversaw a range a subscription services, including Apple Fitness+.

On the earnings front, Peloton posted a significantly narrower-than-expected loss during the quarter, indicating the company’s cost-cutting initiatives had begun to deliver results as it works on a turnaround effort to reinvigorate sales after a post-pandemic demand slump. 

Peloton shares were down 13% at $7.40 in mid-afternoon trading Friday, cutting the stock’s year-to-date gain to around 22%.

Below, we navigate Peloton’s chart using technical analysis and identify key price levels worth watching out for.

News-Driven Breakaway Gap

Since breaking out above the neckline of a double bottom pattern earlier this month, Peloton shares continued trending higher, with the stock’s price staging a breakaway gap yesterday following the company’s upbeat news events.

Importantly, Thursday’s move occurred on the highest trading volume since late August, signaling buying participation by larger market players, such as institutional investors and asset managers.

However, while the relative strength index (RSI) confirms bullish price momentum, it also warns of extremely overbought conditions with a reading above the 80 threshold.

Let’s take a look at important chart levels on Peloton’s chart that investors may be watching following yesterday’s news-driven buying.

Important Resistance Levels to Monitor

Amid a move higher, investors should monitor how the shares respond to the $9.50 level. This area on the chart could attract selling pressure near a trendline connecting the March trough and several peaks from June to August last year

A close above this level could fuel a bullish move up to around $13, a location where investors may look to lock in profits near the prominent December 2022 swing high, which also corresponds with a range of similar trading levels on the chart between February and March 2023.

Key Support Levels to Watch

Upon an initial pullback, such as Friday’s move lower, investors may look for buying opportunities near the stock’s pre-breakout level around $6.70, a region on the chart that closely aligns with a range of peaks and troughs between May 2023 and January this year.

Finally, a deeper retracement could see the shares revisit lower support around $5, where bargain hunters may seek entry points near the double bottom pattern’s neckline.

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As of the date this article was written, the author does not own any of the above securities.