GoPro or NoGo? (May 28, 2015)
GPRO
GoPro ( NASDAQ:GPRO ). This is the 200-day moving average and it’s turning out to be relevant. The 200-day moving average is 57.89. Lo and behold look at where the high was just five cents shy above today’s price. This thing really matters, the reason, here I am doing what I always dog on the news media for, which is giving you a reason for a move that’s already made, but this time it’s actually, I think, accurate.
I guess they’re going to do a drone now. Suddenly GoPro ( NASDAQ:GPRO ), hey, you don’t even need yourself to make these things. And then also some kind of a quad virtual reality thing, whatever; hey, maybe that might be something I might be interested in. What I am interested in now is the fact that the stock is moving. I would want to wait for this if you’re not long already. If you’re long, heck, go ahead and stay long.
This has been a nice to the upside since it crossed the 200-day moving average, which was the first time it had done that since it was on it’s way down. So it’s been a good trade, it’s been a good hold. But if you’re looking at this now think like a trader, I’ll draw you a couple lines here and this is pretty easy to follow. This is really resistance right here, this is really support. The last time the stock gapped above this channel it fell back to the bottom. This time it’s gapping up above the channel, hitting hard resistance here at the 200-day moving average.
One of three things is going to happen, I’m stating the obvious here. First, it’s going to continue higher. In that case you’re going to either be glad you’re long, or wish you had bought where it is. That’s one scenario. Another is that it kind of drifts sideways, in which case you’re going to be happy that you didn’t buy because now you don’t have your money tied up, you’re not all freaking out wondering if it’s going to drop and turn from GoPro to GoNo. And then the third scenario is that the stock actually does fall back like it did here, in which case you’re also going to be happy that you didn’t buy right here.
So what’s the take away? The take away is this, figure out your time frame. What’s your time frame? If you’re a trader, you know, I don’t like this right here, I sure liked it here, I could even say I liked it on this breakout above this level, were it not for the 200-day moving average. We’ll take this away and suddenly this looks like a pretty nice move. But even then you would want to wait for a better entry. But if you are long, and this is the difference, if you are long you stay long.
And so the two actions are kind of almost contradictory because I’m saying if you’re long stay long which you might infer means because the stock’s not moving down, it’s not going to move down so stay long. On the other hand if I’m saying, which I am, wait for a better entry, now I’m saying that the stock is going to move down. Okay, great. First of all, I don’t know, I’m not a forecaster, I’m an observer, and I’m a risk manager, and I’m just telling you it’s not a great time to be buying GoPro ( NASDAQ:GPRO ).
It’s a great time to be holding it, because the trend now, this trend, the daily trend, is actually quite well established. But what does this mean? It means that you want to buy close to this trend line, you don’t want to be buying up here; this is rarified air. How much higher, if you’re buying it now, is the stock going to go before it ultimately does what it’s probably going to do now, which is either go sideways or down?
I don’t really see the stock pulling back much. What’s the catalyst for that? But what’s the catalyst for the stock moving higher from here? That news is all ready out. I’ve gone on a little bit longer than I had intended to about differentiating between yes it’s a good hold and yes it’s a good buy; I hope this helps.
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