Long GPRO on Buy Triggers!3/5/15 Update
We Keep Knocking on the door of the wedge and are turn back each time. Once again that is why we have a trigger on rather then a buy signal on a range. Until we break out of this wedge we will continue to roll over.
I am looking for a rotating back down on the 30 minute stochastic and the a pull back on the hourly and the final rotating back up for a break out.
I have been breaking down GPRO for a couple of weeks now. Looking at how it might follow a similar post lock up trend that TWTR has. For the most part it has done very similar things. Most importantly I have been trying to help people out on where GPRO might fall to and bottom out at.
I am looking at GPRO to be a great long because while its P/E might be at 43.84 but its forward P/E is only 24. If you believe 43.84 is a good valuation than over the next 12 months the stock should raise to 60+ to maintain that valuation.
Instead of trying to really pick a day for a bottom I set up buy triggers on GPRO to enter a long position.
Buy Trigger 1: is a breakout of the fallen wedge pattern. If we break that trend I believe the bottom will be in. We might retrace that trend line after the break but overall we will move up.
Buy Trigger 2: Is what I am calling a trap door support bounce. Right now we have many support line coverging on GPRO. But it could be a fake support in which we break through the level and fall to the bottom of GPRO raise to 90+. I believe then we would have shaken weak hands out and the bottom will be in.
Those are my two buy triggers, when they happen then I will enter a long position.
Remember sell into strength and don't be afraid to buy the fear.
These are my notes on my other chart about GPRO will follow TWTR's post lock up trend. But this chart is just the GPRO chart.
I was hoping that Gpro would flush on the lock up in order to find support on its lower trend lines. Instead we got a rally then a dump. I wanted to see a dump to a trend line then a rally so the trend would now be up rather then down.
But overall gpro is still following what TWTR did post lock up. What I am still waiting for is for a lower trendline bounce in order to start a new upward trend. I think we are coming very close to that range.
How have we followed TWTR lock up.
1) Both Had Earnings beats and dropped rather then rallied.
2) After the drop on earnings both had a small rally that failed. Twtr rally came right after lock up and gpro had its rally right on lock up. That was the main difference on when it happen but both had a pop and then a entrancement back to the lows.
3) Twtr slowly grinded downward to his lower trendline again before popping out of a tight channel.
Gpro is now stuck in a tight channel as well and I am looking for it to to break to the upside of this channel after hitting close to its lower channel line range of $40-41.
We currently have a Channel within a Wedge within a Channel X mark the spot coming up.
Channel 1: a really right channel from the small rally we just had
Channel 2: A bullish wedge pattern. Usually downward wedges break out to the upside
Channel 3: The overall larger channel & old support line back to the IPO days
I am looking to get down close to these trendline before moving up.
The main point is I am trying to find catch the bottom here before we grind up to the large channel upper channel line.
That bottom could be in now because we are close. Could be in on the X mark the spot or even a trap door below the support lines I have but the bottom is coming and a buying opportunity is to be had.
FYI: AMBA earnings are next week. I am looking for a beat on their earnings. However, I am looking for it to move the stock one way or another. If AMBA drops out we might see some of these trendline fail...if they beat the bottom could be in on GPRO.
It looks like the bottom will be in on Gpro at the latest next week.
