Trade of the Day: GoPro (GPRO)

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Many extreme sports junkies will wake up happy tomorrow to find a package from GoPro Inc (NASDAQ:GPRO) underneath their tree. Traders who buy the shares now are likely to be happy, too, despite a rocky ride the past few months.

GoPro, which makes cameras designed for use in very extreme activities like skydiving, base jumping and mountain biking, saw its stock perform in extremes this year. It IPOd around $31 in June, then zoomed up to $93, and crashed back down again.

On Dec. 23, the 180-day post-IPO lockup on the shares was lifted, and many expected to see heavy selling. Instead, the buyers jumped in, and the stock rose 5% on Tuesday. GoPro’s technicals indicate its upward trajectory will continue into 2015.

At the Dec. 23 close, Profit Scanner powered by Recognia found that a bullish Continuation Wedge pattern appeared on GoPro’s chart. A Continuation Wedge tells traders that after a temporary pause, the prior uptrend is set to continue. A Continuation Wedge represents a temporary disruption to an uptrend, taking the shape of two converging trendlines that are both slanted downward against the trend. During this time, bears attempt to overtake the bulls, but the bulls triumph in the end as the break above the upper trendline signals a continuation of the previous uptrend.

GoPro’s Continuation Wedge carries an upside price target of $81.00 $86.00, which would represent a 31% to 39% move from current levels if the pattern resolves to completion. And this short-term pattern is expected to play out in just 17 trading days, or before the end of January.

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GoPro doesn’t have support until $43.29, so a tighter stop-loss might make sense. Profit Scanner offers $57.83 as a fairly tight stop. Conversely, resistance doesn’t exist until $68.34, a good 11% higher from current levels. Aggressive traders who get in now can use that area to take partial profits, while conservative traders may wish to see GoPro clear those levels before establish positions. 

Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.


Article printed from InvestorPlace Media, https://investorplace.com/2014/12/trade-day-gopro-gpro/.

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