GPRO blows out earnings – 40% short


By now you should know GPRO blew out earnings. They are also entering a new virtual reality category with the purchase of Kolor. I’ve been stuck in this stock since I got in after-hours last quarter at $57 but didn’t give up on it. What I like best about GPRO is the brand they are building. The brand ensures they will continue to have pricing power with little to no margin pressure and it also allows them to successfully enter new categories.

Technically, it looks like GPRO will reach around $57 near the 200 DMA in very short order – probably by the end of this week. When it does, I plan to sell some covered calls in expectation of a pull-back. I plan to buy calls on that pull-back in anticipation of a re-test of the 200 DMA over the next several weeks followed by a break above it to the next resistance at $70 over the next 1-3 months.

Additionally, if the shorts successfully cause any sort of significant pull-back tomorrow morning, I will be increasing my exposure. 40% of the short is float! WOW. This thing is again a momentum stock. Glad I held on. Brands are powerful things. I also have shares in my IRA which I plan to hold for the longer-term.

Ben Rabizadeh

About Ben Rabizadeh

I devised the Story Trading method to earn 5-100% returns from intraday to multi-month periods. I'm best at anticipating the next story & reading market emotions. Up 100% in 2013 & 200% in 2014.

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