We’re fascinated with the news surrounding GoPro (GPRO). The stock went public on June 26, 2014 at $24 per share and has since increase in price to $89.93 as of October 8, 2014. As public offerings go, the rise in price is considered a success. As recently as October 7, 2014, Barclays raised their price target for GPRO from $45 to $60, in spite of the fact that the stock is already trading well above the new target price. It seems that Barclays doesn’t want to appear over anxious to recommend the stock even though they are not confirming their expectation for the stock to decline.
Our take on this matter is always very clear, what is the downside risk? In this regards, we have run Edson Gould’s Speed Resistance Lines (SRL) to determine what the most realistic levels might be if the price of the stock were to decline.
The chart below depicts the conservative and extreme downside targets.
The downside targets are:
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$68.93 (conservative)
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$45.50
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$31.28 (extreme)
This review of GPRO is to determine how accurate the downside targets are. In addition to the current downside targets, the upside target is indicated to be $103.40. The parabolic nature of the current rise may not be over. However, depending on the length of time that passes, investors/speculators interested in GPRO would do well to wait for the stock to fall below the ascending $45.50 before reconsidering the merits of this stock.