Can GoPro, Inc. (GPRO) Take Out $40?

GoPro Inc (GPRO) speculators are targeting a familiar strike

Digital Content Group
Mar 10, 2015 at 10:44 AM
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GoPro Inc (NASDAQ:GPRO) is defying this morning's broad-market trend lower, and was last seen 1.8% north of breakeven at $38.75. Meanwhile, at least one group of option traders foresees the stock muscling back atop the round-number $40 level in the near future.

Looking more closely, GPRO's most active option by a roughly two-fold margin is the March 40 call. Speculators are initiating long positions here, confident the shares will rebound above $40 by next Friday's closing bell -- when the front-month options expire. These fresh bullish bets also echo activity we observed last week.

On the charts, however, GPRO has been locked in a long-term downtrend, tumbling over 60% since hitting an early October record high of $98.47. What's more, the shares closed below $40 yesterday for the second time this month -- prior to which this territory hadn't been charted since mid-August.

Not surprisingly, the Street has grown increasingly bearish toward GoPro Inc (NASDAQ:GPRO). Short interest swelled nearly 35% during the two most recent reporting periods, and now accounts for 35.1% of the stock's total float. Additionally, eight of 13 analysts tracking the shares have doled out "hold" or worse recommendations. However, analysts at FBN Securities today said "the stock should stabilize soon," and view GPRO's drop as "an opportunity for risk-tolerant investors."

 

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