On July 14th, 2022, after the market closed, The Wall Street Journal reported that the activist investor Elliott Management has built up a stake of over 9% in Pinterest.
The stock (PINS) ended the following trading session up over 16%, at $20.40.
However, that wasn’t enough for PINS to break its best respected weekly moving average lines, that registered on August 2nd, 2021.
We shared these daily and weekly charts in a tweet on Twitter, around an hour before the end of July 15th day’s session:
Last week, after the market ended the August 1st session, Pinterest released its 22Q2 earnings. The following day saw the share price spiking to a high of $23.77 and ending at $22.31, 11.61% above the previous day’s close.
PINS ended the week at $22.55 and celebrated the one year registration anniversary of the weekly body resistance line – the 16-week EMA ($21.11) – by shattering it:
Next up for PINS to face is the wick resistance line – the 36-week SMA.
Considering the close of last week’s share price, the 36-week SMA value is now updated to $25.08. Here’s the updated weekly chart:
No doubt Pinterest now picks up interest.
Additional Insights
PINS weekly chart provides an excellent opportunity to share some additional insights on the strength of the 16-week EMA body resistance line.
Before diving into the details, let’s add two additional chart images:
- As can be clearly seen in the above weekly charts, the green candle that represents the week starting 2021-10-18 plays a major role in respecting the resistance line in subject.
- The body of the candle that represents the week starting 2022-06-27 (Fig. 1) is very close to the line, however, still, it is below the line.
- The candle that represents the week starting 2022-07-18 (Fig. 1) has its wick cross the line, however, the body is well below the line.
- Even if for finding the best respected resistance line we ignore the price action (candles that are) close to the 16-week EMA resistance line, PINS still chose to respect that line. To test that, we set the fitting algorithm to include all candles from its IPO (week of 2019-04-15) to 2022-01-31 (inclusive). The result came out the same (Fig. 2): the best respected weekly resistance line was the 16-week EMA.
When such a strong line breaks, even more attention should be given to the price action.