Fitbit Stock Continues to March Higher
Fitbit (FIT) - Get Report is a phenomenon and its shares continue to rise. If you were thinking of selling, don't. Here's why.
Since June 5, FIT has climbed as much as 13% and now trades at close to $14. The stock is seeing increased buying interest, as evidenced by the rise back above the 20-day moving average.
The chart below, courtesy of TradingView, points to potentially 10% more gains in the weeks ahead.
Right now FIT is up 5% just in the past five trading days alone, although the shares are down 53% for the year to date. By contrast the S&P 500I:GSPC index.
The chart shows the stock has clearly bottomed at around $12 per share (green line). At the same time, FIT has just reclaimed its 20-day average at $12.87 (blue line), and -- on a intraday basis -- it has also moved above the 50-day average at $13.65 (pink line) average at $13.65. Both events present a strong bullish near-term trend.
So while Fitbit's long-term fundamentals, including its competitive position with Apple (AAPL) - Get Report , is still being determined, the stock has nonetheless been a money-making trade. This time won't be any different. The next move FIT will likely make is to reclaim the 100-day moving average at $14.32 (yellow line), which will then put it on target to test near-term resistance at $14.76. This combination will translate to rise of about 9% from Wednesday's close.
With the stock still down almost 50% year to date and 30% in six months, there are likely more net buyers of the stock now than there are sellers. Plus, the 16% rise from its 52-week low suggests expectations have been adjusted.
As with other punished stocks, the bet is that FIT, which has a consensus buy rating and a $21 target, will now continue to climb heading into the holiday shopping season.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.