GoPro, Inc. (GPRO) shares fell as much as 22% during Monday's trading session after the company cut its fourth quarter revenue estimate to $340 million from prior expectations of $470 million. In addition, the company announced that it lowered the price of its Hero6 cameras by $100 to $399, which it expects will have an $80 million impact on the current quarter's revenue. The company also announced that it would be cutting about 20% of its global workforce to save on costs.

The stock pared its losses and closed just 13% lower after CEO Nick Woodman suggested that the company would be open to a sale. According to CNBC and Reuters, the company had hired JPMorgan Chase & Co. (JPM) to help it with a sale process. However, GoPro is not currently in any active talks with a buyer, and it is unclear if there is an interested acquirer, according to these reports. The prospect of a buyout could keep many short sellers at bay for the moment. (See also: GoPro Says Open to Sale but Not Actively Pursuing.)

Technical chart showing the performance of GoPro, Inc. (GPRO) stock

From a technical standpoint, the stock broke down from S1, S2 and trendline support on sharply higher-than-average volume. The relative strength index (RSI) fell to oversold levels at 16.16, while the moving average convergence divergence (MACD) experienced a bearish crossover. The stock opened on Tuesday morning below trendline support, which suggests that it could have trouble recovering from the decline.

Traders should watch for a close above trendline resistance at around $6.45 on Tuesday and potentially a move above S2 support levels at $6.58. If the stock continues to break down, traders could see a move to fresh all-time lows as the company struggles to increase revenues following its iconic product launch a few years ago. The oversold RSI reading could suggest a near-term recovery or period of consolidation before a further move lower. (For more, see: GoPro Shares Slip Again as Analysts Warn of Market Saturation.)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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