Trade of the Day: GPRO Stock Mounting an Uptrend

GoPro Inc (NASDAQ:GPRO) — Shares of this maker of wearable and mountable cameras have risen more than 44% off their year-to-date lows from early March, yet my social media indicator doesn’t flash a whole lot of exuberance about the stock. But it looks like the sharp decline from the October highs to the March lows has shaken out the last of the weak hands.
When GoPro announced quarterly earnings on April 28, it blew away estimates, reporting a 54% year-over-year jump in sales and a 149% increase in earnings. Gross profit margin rose to 45.1% from 40.9% in the year-ago quarter. This was unsurprisingly followed by a slew of bullish analyst notes.
Looking at the chart of GPRO stock, after the strong rally from last summer/autumn, gravity set in by October, and shares were off 62% when all was said and done in March. With the bulls flushed out, the stock began to signal downside exhaustion and consolidate with an upward bias.
Following the April 28 earnings report, GPRO stock rallied nearly 13% the next day, leaving behind a notable up gap that also pushed the stock back above its 100-day simple moving average (blue line).
Over the ensuing five trading days, shares quickly fell back down and fully filled the April 29 up gap. In a show of strength, however, GPRO stock again began to rise, all the while holding marginally above the 100-day moving average. Filling the gap also served as a retest of a previous mini-resistance area near $47.
Earlier this week, GPRO stock managed to marginally push back above the post-earnings rally high, which also brought shares up to the next horizontal resistance line around the $54.50 area. It looks like the strong earnings report has changed the direction back up. Active investors should look to buy GPRO stock on a move above $54.50 for an initial target in the $60 area in the coming month.
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