GoPro (GPRO) - Get GoPro, Inc. Class A Report reports earnings after the market close on Thursday, and whether or not the company delivers positive numbers may depend on whether or not it literally delivers its products.
There have been reports that availability checks for the Hero 5 cameras show that supply is low, and that Karma drone deliveries will be delayed until the end of November, after missing their original May shipment date.
Over the last five months, however, the stock has "delivered" from a price perspective. But the report this week comes as GoPro is positioned at a key technical juncture.
The weekly chart illustrates the multi-year decline that saw shares lose over 90% over their value from their 2014 high to their low this year.
Since making that May low, the stock has rallied back up to the long-term downtrend line drawn off the 2014 and 2015 high, and that five-month rise created an uptrend line that is intersecting with the downtrend line.
A series of high wick candles marked the September high on the daily chart that tested the downtrend line. The pullback that followed bounced off the uptrend line but failed to penetrate the 50-day moving average or return to the downtrend line.
This price action took the relative strength index back below its 21-period average and center line, and saw moving average convergence/divergence make a bearish crossover and move below its center line.
The vortex indicator, which is designed to identify early shifts in trend, also made a bearish red-over-green line crossover, suggesting future price movement is lower.
The accumulation/distribution line has been tracking lower in bearish divergence to price since the rally off the May low began, and Chaikin money flow has spent most of that time under its center line, readings that reflect a lack of conviction on the part of buyers of the rally.
GoPro is a good risk/reward short candidate at its current level, considering the nearby buy-to-cover stop location at $14.75, but the trade is designed for a quick profit or loss, and the position should be closed out ahead of the Thursday earnings report.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.