Peloton’s Stock Achieves Golden Cross: What It Means for Investors

Peloton Interactive Inc PTON recently reached a significant technical indicator — the Golden Cross.

Currently, Peloton’s stock is down 10.40% for the year, but has gained 10.49% in the past month. This bullish signal may indicate future upward movement.

The Golden Cross occurs when the 50-day moving average of a stock surpasses its 200-day moving average, and Peloton has just experienced this crossover.

Chart created using Benzinga Pro

Peloton’s shares, currently priced at $5.40, are above its critical exponential moving averages — five, 20, and 50-day. This suggests strong buying interest among investors. The eight-day simple moving average stands at $4.79, and the 50-day simple moving average is $4.27, both signaling positive trends.

The Moving Average Convergence/Divergence (MACD) indicates a value of 0.15, supporting the bullish sentiment for Peloton. However, the Relative Strength Index (RSI) of 66.53 points to the stock being close to overbought levels.

Additionally, Bollinger Bands suggest further potential growth, with current levels ranging from $4.46 to $4.96.

Read Also: Peloton’s Turnaround Is Happening

Peloton has adjusted its business strategy from hardware sales to software development. Despite the shift, the connected fitness company faces challenges. Although software typically results in greater profit margins, the decline in membership numbers and flat revenue in the fiscal fourth quarter are concerning indicators.

Following recent debt refinancing, there are rumors of a possible buyout. Nevertheless, Peloton is not the high-growth stock it used to be.

Even with the Golden Cross and various bullish signs, investment in Peloton carries risks. Heavy debt, a decreasing user base, and a specialized market indicate that any gains may be temporary. Investors should proceed with caution when considering the company’s long-term outlook.

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Photo: Courtesy Peloton