There’s a chance the Peloton Interactive, Inc. (NASDAQ:PTON) sell-off ends soon, at least temporarily. The company faces significant challenges in the long run.

Since January the stock has lost about 50% of its value but now it's extremely oversold. The last time it was as oversold as it is now was when the COVID-19 crash was ending in March of 2020.

Oversold means trading at an extreme below what would be its typical or average trading range. Sometimes when this happens the stock reverses back to its average. This means a rebound.

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Peloton is also closing in on a level that could be support. The $72 level was resistance in August. The sellers who shorted the stock then have been losing money ever since.

If they can cover their shorts at $72, they will finally be able to get out of their position at breakeven. This means there will probably be an abundance of buy orders at the $72 level. If there are enough of them, support will form. That could put a halt to the sell-off.

Photo credit CNW Group/Peloton.