GoPro, Inc. (GPRO) shares soared more than 10% earlier this week after the company upgraded its third quarter forecast. Management anticipates revenue of between $290 million and $310 million – at the high end of consensus forecasts calling for $304 million – and gross margins of between 36% and 38% that would make the company profitable on a non-GAAP basis. JPMorgan analysts responded by increasing their price target from $13 to $15 per share.

Over the past 52 weeks, the company's shares have fallen more than 25% amid Hero 5 production delays and the Karma drone recall. Some analysts began to question the company's ability to differentiate itself in an increasingly crowded market, but shares began to rebound last month, and the situation could be on the mend. Higher revenue and gross margins could suggest that the company's brand remains competitive in the space. (See also: Why GoPro's Shares Could Rise by 30%.)

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

From a technical standpoint, the stock gave up much of its gains from its early August price increase by early September before rebounding from its 50- and 200-day moving averages and breaking out from trendline resistance. The relative strength index (RSI) is approaching overbought levels at 66.89, but the moving average convergence divergence (MACD) could see a bullish crossover in the near term.

Traders should watch for an extended breakout to R1 resistance at $10.72 or a move lower to the pivot point at $9.34. The spinning top candlestick pattern during Thursday's session suggests a lot of indecision in the market, which means that traders could see more consolidation before a move higher. This consolidation could occur between the pivot point and R1 resistance, with strong support at the 50- and 200-day moving averages. (For more, see: Goldman Upgrades GoPro From Sell to Neutral.)

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

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