GoPro, Inc. (GPRO​) shares fell more than 10% in early trading on Thursday despite the company reporting better-than-expected third quarter financial results. Revenue rose 37.1% to $329.81 million – beating consensus estimates by $16.71 million – and earnings per share of 15 cents beat consensus estimates by 13 cents per share. The problem was that full-year revenue guidance came in sharply lower than analysts were expecting at $1.305 billion to $1.325 billion.

Prior to the third quarter financial results, some analysts had been bullish on the company's prospects. Longbow upgraded the stock to Buy with a $13.00 price target on Oct. 18, saying that management had stabilized the business and improved execution. Interestingly, the analyst firm moved $30 million of its forecast fourth quarter sales to the first quarter due to planned inventory reductions, which could be the cause of the lower guidance. (See also: Sell GoPro on Google's New Camera or Buy on the Dip?)

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

From a technical standpoint, the stock moved sharply lower and could break down from a head and shoulders pattern. The relative strength index (RSI) moved into slightly oversold levels at 41.18, while the moving average convergence divergence (MACD) could see a bearish crossover in the near term after experiencing a brief rally late last month. Traders should maintain a bearish bias on the stock given the full-year guidance and chart patterns.

Traders should watch for a breakdown from the shoulder line, S1 support and the 200-day moving average at around $9.06 to S2 support levels at $7.91. If the stock manages to hold these support levels, traders should watch for some consolidation around S1 support before a move in either direction. The crossover of the 50-day moving average above the 200-day moving average suggests a moderate bullish bias over the long-term, but the short-term bias is bearish. (For more, see: Top 5 Shareholders of GoPro.)

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

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