GoPro, Inc. (GPRO) shares rose nearly 10% during Tuesday's session, extending the stock's impressive one-month rally to more than 50%. While there has been little in the way of tangible news, other than the occasional M&A chatter, Longbow analyst Nikolay Todorov believes that today's Hero 8 Black launch has been a catalyst over the past few weeks.
The $399 Hero 8 Black includes multiple improvements, including a new integrated mounting system, improved software experience, and the ability to shoot up to 4K footage at 60 frames per second. In addition, the new camera supports "mods" that enable users to add accessories, such as a GoPro microphone, LED light, or flip-up screen.
Investors are hoping that the new launch – which has already drawn favorable industry reviews – will help put it on solid footing after the failed launch of its Karma drone, multiple layoffs, and the culling of its crowded product line-up. The new camera's feature improvements could also put some distance between GoPro's flagship product and the competition.
From a technical standpoint, the stock briefly broke out from its 200-day moving average at $5.48 before falling back below those levels by the middle of the session. The relative strength index (RSI) rose to overbought levels of 73.59, but the moving average convergence divergence (MACD) remains in a strong bullish uptrend. These indicators suggest that the stock could experience some consolidation before moving higher.
Traders should watch for a breakout from the 200-day moving average toward prior highs or around $6.00 or even earlier highs of around $7.75 over the coming sessions. If the stock fails to break out higher, traders could see a move lower toward trendline support at $4.75, the 50-day moving average at $4.49, or some consolidation in between.
The author holds no position in the stock(s) mentioned except through passively managed index funds.