On The Threshold Of A Breakout, But Not Good Enough

You can't just threaten to make a breakout, you actually have to make the breakout.

With Pinterest, inc. (PINS), it's the actual breakout that we need to see. Internet stocks ($DJUSNS) have been both absolute and relative laggards, but stocks like PINS are beginning to show some relative strength amongst industry peers. I just wouldn't be ready to follow stocks like PINS until it at least makes a key price breakout. Check out the chart here:

Enter Pinterest Inc. (PINS):

On May 4th, PINS closed at 24.20 after a lengthy advance. Since then, PINS has traded back up to this 24.20 price resistance on an intraday basis multiple times, but without a single closing breakout. Volume trends have been bullish since early August, but again, we've yet to see that breakout. It's encouraging to see the 20-day EMA rising and trending above the 50-day SMA, but ultimately we need to see confirming price action and a breakout. The individual performance of PINS could trigger the breakout or it could be the overall internet group that shows the necessary strength. Bottom line, we cannot assume the breakout will occur, we simply need to see it.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.