Shares of GoPro, Inc. (GPRO) jumped nearly 5% on Monday with no major announcements, but the uptick followed a similar move in Fitbit, Inc. (FIT). GoPro has been struggling in recent quarters, with shares down nearly 20% over the past 52 weeks. During the first quarter, the company reported revenue that increased nearly 20% to $218.61 million – beating consensus estimates by $10.72 million – along with an in line net loss of 44 cents per share. The company has seen limited success in product launches since the HERO 4 in September 2014 and may see growing competition from Garmin Ltd. (GRMN).
Many traders have speculated that GoPro could be a great acquisition opportunity for a strategic buyer. For example, the product could be a valuable addition for companies like Apple Inc. (AAPL), which already acquired Beats, or Facebook, Inc. (FB) in a bid to compete against Snap Inc. (SNAP) with a hardware product. However, Nick Woodman’s controlling stake in GoPro makes a deal unlikely to occur given the tiered voting share structure. (See also: GoPro Reports Q1 Loss, Reports Robust Sales Growth.)
On a technical level, the stock rebounded from S1 support at $7.77 to upper trendline resistance, 50-day moving average and pivot point levels at around $8.50. The relative strength index (RSI) remains neutral at 49.20, while the moving average convergence divergence (MACD) could see a bullish crossover if the rally is sustained.
Traders should watch for a breakout from these key resistance levels to R1 resistance at $8.93 or R2 resistance at $9.36. If the breakout does not occur, traders may see ongoing consolidation within the existing price channel between $7.77 and $8.44. A breakdown from this channel could lead prices to re-test their lows at the S2 support of $7.31. (For more, see: How Low Will GoPro Go?)
Charts courtesy of StockCharts.com. Author holds no position in the stock(s) mentioned except through passively managed index funds.