2 Stocks Nearing The End Of A Pattern: Technicals To Watch For Next Week

Carlotz Inc. LOTZ and Peloton Interactive Inc. PTON both made big moves Wednesday.

Carlotz closed up 7.23% at $7.05 and Peloton closed down 6.14% at $99.96. Peloton stock lost ground amid a class action lawsuit filed in a California federal court.

Carlotz Daily Chart Analysis

• Carlotz is nearing the end of what technical traders would call a falling wedge pattern.
• The stock is trading below both the 50-day moving average (green) as well as the 200-day moving average (blue), indicating sentiment in the stock has been bearish recently.
• These moving averages may both hold as a resistance level in the future.

Key Carlotz Technical Levels To Watch

• The stock has been falling in recent months, forming what technical traders call a falling wedge pattern.
• This pattern is considered a bullish reversal pattern as connecting the highs shows a much steeper drop compared to connecting the lows of the chart, forming a wedge.
• A break above the line connecting the highs may signal the stock is changing trends and ready to start heading back up.
• A break below the line connecting the lows could bring about a stronger downward push.

Peloton Daily Chart Analysis

• Peloton looks to be forming a head-and-shoulders pattern and is now nearing another key support level.
• The stock is trading below both the 50-day moving average (green) as well as the 200-day moving average (blue), indicating sentiment in the stock has been bearish recently.
• These moving averages may both hold as a resistance level in the future.

Key Peloton Levels To Watch

• The head-and-shoulders pattern occurs after the stock pulls back steeply and buyers are unable to push the price to new highs.
• This bearish reversal pattern can be confirmed when the price is able to cross below the support levels previously formed by buyers. This line may be considered the dropoff line. 
• The $100 level is an area where the stock has been able to find buyers. Bulls are looking to see the price bounce here and move higher.
• Bearish traders would like to see this support level fail to hold.

Photo courtesy of Peloton.