Signal management

Where is Pinterest stock headed after jumping 35% on Elliot Management stake?

Pinterest, Inc. PINS soared 35% in Thursday’s after-hours session following a report that Elliott Management built a 9% stake in the social media company and was in talks with Pinterest, although the details and intent of the talks are not known.

The stock was trading around 15% higher just above the $20 mark at Friday’s writing.

Pinterest, like many other social media companies, has struggled amid quantitative easing and runaway inflation, leading to lower revenue. Although Pinterest beat estimates when the company reported its first quarter results on April 27, its earnings per share had fallen 11 cents per share for the same period of the year before a loss of one cent per share.

The company is expected to release its third-quarter financial results on July 27, and marketers and investors will be watching the impact of rising interest rates on Pinterest’s advertising revenue.

From a technical perspective, Pinterest has been trading horizontally since May 24 between $16.14 and $21.99. When the stock spiked higher on Thursday, it rejected the upper horizontal line of the pattern and opened the trading day near the midline of the range.

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The Pinterest graphic: Pinterest fluctuated up and down in its sideways trading pattern, entering short uptrends and downtrends while rejecting upper and lower trendlines. The most recent move was in a downtrend, but when the stock hit its daily high on Friday, the downtrend was reversed slightly.

  • Pinterest climbed just 7 cents above the most recent lower high of $20.69 and paired with similar price action at that level on July 6, July 7 and July 8 may have printed a bearish quadruple top . If the pattern becomes dominant, Pinterest is likely to retrace lower over the next few trading days.
  • If Pinterest is trading lower on Monday, bullish traders will want to see the stock print a reversal candlestick, such as a doji or hammer candlestick, above the recent low of $17.32. If this happens, it could signal that a new uptrend is emerging.
  • Pinterest has resistance above near the $22 mark and at $27.32 and support below at $19.04 and $14.82.

See also: How to read candlestick charts for beginners