HAL9000
Long

Ride the GPRO bandwagon?

NASDAQ:GPRO   GOPRO INC
2 months ago
POOR FUNDAMENTALS, BUT VALUATION COMPELLING?
It took a BUY rating from BAC             , ahead of the much anticipated Karma             drone product launch (conference due today) to propel the shares significantly higher, even though the company has been suffering from decreasing topline growth rates and an unprofitable business model. Will this trend continue?

TECHNICALLY STRONG
After the infernal descent of 2015, this year has mostly been one of consolidation for GPRO             . Since the all-time low of mid May 2016, it has staged an impressive rebound (c. +80%) and it seems that the rounding bottom formation of 2016 is ending successfully, in a breakout to the upside supported by good volume and preceded by a golden cross. Today is the 3rd day of vertical upside on significant volume , suggesting some sustainability to this movement.

Those tempted by further potential upside could initiate a partial position here and buy further on weakness all the way to $14.00. If the breakout is further confirmed, the upside potential from here could be substantial but given the recent outperformance, the trade should take time to unfold. Allow wide stop losses to give this trade some time.

HOW TO TRADE THIS?
Key levels on the downside: $15.00/14.50/14.30/13.50
Key levels on the upside: 16.25/20.00
Aggressive investors should use a 13.50 stop-loss (-14%)
more cautious traders should use a 14.30 stop-loss
Alternatively, buy a 21/10 OTM Call with a 19/20 strike and pay some 2% for unlimited potential upside
2 months ago
Trade active: Technical strength confirmed. 14.30 support played its part the day after we initiated the trade (closed at 14.26). Trade is now in the money for those who initiated it 4 days ago and put a stop loss at 13.50. Yesterday we breached the 16.25 resistance intraday (a mild positive). Watch a close above this level for further strength confirmation.
2 months ago
Trade active: 16.25 resistance breached handsomely, with a weekly close above it.
Major short squeeze currently taking place in GOPRO.
All systems go as far as this long trade is concerned.
Raise stop-loss from 13.50 to 14.00.
Keep long position - Those who missed it should wait for a pullback around 16.25.
2 months ago
Trade active: The current high, tight consolidation flag above the top of the previous descending channel augurs well. This intermediate consolidation could provide the steam for the next leg up. Keep long. Raise stop loss to 14.50.
2 months ago
Trade closed: stop reached
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