The Closing Print live trading and financial blog during market hours.

Pinterest is a new (PINS) stock/options position, with the potential to follow through in the coming days. Price action pulled back to the 21d moving average after reporting a 33% earnings beat on February 6, 2020. Earnings are increasing.

Click to enlarge: Courtesy MarketSmith IBD

Pinterest makes money by targeting advertising at more than 265 million monthly users (as of August 2019) who bookmark images they find online by “pinning” them to themed “boards.”  PINS targets these users, selling “promoted pins” and click-to-buy shopping ads to businesses and hundreds of retail partners. Institutions are adding positions.

Courtesy MarketSmith IBD

Looking at Pinterest’s recent growth, we can estimate a range for key metrics in 2024. Over the past three years, it has grown its user base between 45 million and 65 million a year. A best-case scenario might assume that growth improves to 65 million, giving the company 625 million users in 2024. On the other hand, growth could slow to just 30 million a year, bringing the total to 450 million. Splitting that difference gives Pinterest approximately 540 million monthly active users. – article from Motley Fool

Simple 21d Strategy

This potential candidate follows a simple strategy; buy the dips to the bullish 21d moving average once we see evidence of buyers returning in the days that follow, then trail a stop below the price.

Pinterest Daily

Volume was obvious on Wednesday, propelling Pinterest (PINS) higher throughout the day. RSI rebounded at 50, pointing higher by the close. MACD will turn as a function of price, so look for momentum to shift to the bullish side. Hat tip to Joel in the trading room!

As Pinterest (PINS) starts the session, we’ll watch for volume to confirm this new proposition. VWAP will add to our signal list, so we need to see the indicator rising today with the price above. RVOL should be > 2.0.

Notice relative volume on Wednesday! RVOL + VWAP = $$$$$

Pinterest (PINS) is trading higher in extended hours, at 23.70 (+0.10). Wait for VWAP to mature after 10:00 AM before considering an entry. We’ll be monitoring the stock/options during the LIVE broadcast.

We already bought a small position, starting with March 23 calls and will considering adding if our conditions are satisfactory. We might buy common for the kids Coverdell accounts as well.

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Happy Trading,


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