Pinterest has had a double-bottom right near the initial opening IPO price after a large unexpected loss on its first earnings. The price took a solid cut, but investors are still bullish given its solid numbers in revenue and user activity (definitely more important, to an extent).
I'm tracking two possible scenarios:
1) The current price is sitting on the edge of the gap down after earnings. There's a gap to fill above and the recent movement and volume suggests this could fill soon.
2) And on the other hand, the price is nearing the top of the channel it has traded in since earnings. Another retest of support probably won't hold in my opinion. I admit that I am bearishly biased here, but social media stocks seem to lose half of their IPO value before finding any traction (~$12 in the case of Pinterest).
All said, I'm remaining neutral until I see the next move. A break above and I'll go long for the gap to ~$30; a reversal from this area and I will go short at least until it reaches the bottom of the channel (but hopefully further). I don't have a solid time or price target on this move, but I would expect $20-21 to be the first stop.
Disclaimer: This is my own SPECULATIVE opinion and is not financial advice.
I'm tracking two possible scenarios:
1) The current price is sitting on the edge of the gap down after earnings. There's a gap to fill above and the recent movement and volume suggests this could fill soon.
2) And on the other hand, the price is nearing the top of the channel it has traded in since earnings. Another retest of support probably won't hold in my opinion. I admit that I am bearishly biased here, but social media stocks seem to lose half of their IPO value before finding any traction (~$12 in the case of Pinterest).
All said, I'm remaining neutral until I see the next move. A break above and I'll go long for the gap to ~$30; a reversal from this area and I will go short at least until it reaches the bottom of the channel (but hopefully further). I don't have a solid time or price target on this move, but I would expect $20-21 to be the first stop.
Disclaimer: This is my own SPECULATIVE opinion and is not financial advice.
Trade active:
Wild day today... opened at $28, dropped to $27, rose to $29, closed back at $28. I bought longer dated puts during the initial drop, holding still. When it broke above $28 I opened a swing trade to $29 (gap fill).
Head fake got me good, but made it up on the swing trade. Scenario 1 played out and scenario 2 is definitely still on the table. With the spinning top candle and close below $28 today, I'm comfortable holding the puts for a solid reversal possibility.
Head fake got me good, but made it up on the swing trade. Scenario 1 played out and scenario 2 is definitely still on the table. With the spinning top candle and close below $28 today, I'm comfortable holding the puts for a solid reversal possibility.