Trade Update: GoPro Chart Shows Potential 30% Decline

Investors who are looking for a picture-perfect short candidate may want to consider GoPro (GPRO) - Get Report . Even after the punishment the stock has taken -- it is down 82% in 12 months -- technical charts show that shares could still fall up to  30% more.

This is in contrast to what the chart said prior to the company's first-quarter earnings report. At the time, it was not known that the struggling action-camera maker would postpone the launch of its Karma Drone until the holiday shopping season. While that may be a solid strategic move, it won't help GoPro stock in the near term, especially after first-quarter revenue fell 49.5%, while forecasts say fiscal-year revenue could fall as much as 17%.

GoPro shares closed Friday at $8.88, down 15% from the prior week's close of $10.46. The shares are down 50.69% so far on the year, compared with a 0.13% rise in the S&P 500 (SPX) index. Over the next six months, GoPro stock might not find technical support until the shares reach $6.00.

Take a look at the chart below, courtesy of TradingView.

As you can see from the chart above, GoPro shares have plunged almost 23% below their $11.50 support area (blue arrow), likely thanks to the company's decision to delay its key product. In this case, support has now become resistance. This means, at best, GoPro stock could get back to $11.50, but is unlikely to reach any of its key (20-day, 50-day, and 100-day) moving averages. The stock is deep in bearish territory.

The red arrow indicates the stock's 52-week low of $8.76, reached on Friday. With no near-term catalyst to drive revenue and earnings, GoPro stock will struggle to find a floor until Karma is released six months from now. And once the market realizes that Karma will likely account for only about 2% of GoPro's 2016 revenue, the stock will be punished even more.

GoPro likely won't find support until around $6 per share -- and that's assuming Karma doesn't suffer from increased competition and market saturation.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.