GPRO update: almost there?

Over a month ago we assessed the charts for GPRO and noticed several improving facts. However, price continued to decline and as such we needed to adjust our POV and count as we let the market guide us. What we can observe now is that GPRO is wrapping up the last and final waves of big C down, which should lead to an ATL. Since GPRO opened on it’s IPO at $28.65 and was offered prior at $24, a 50-62% retrace of that price is not uncommon before the next bull starts. This thus targets $14.5 to $9.20.

gpro1Currently we can count GPRO in wave white iv of green 5 of red iii or c. We don’t know before hand if this big blue C-wave down (see chart below) will unfold in 5 or 3 waves and as such the red iii/c labeling. In the 3-waves case we expect white iv, which price is currently in, to peak at around $22, before v takes price to around $18-$16. That would then be the ATL.

The 5-wave down for big wave C scenario has price then, instead, form a larger bounce for red iv to about $24-$26, before red v takes price down into the ideal target zone $14-$9. The two white lines shown an assumed red iv=ii and red v=i relationship, which are merely guidelines. IF price continues passed the wave iv target zone to the $30-$32 price zone, we can be rather certain the low was struck.

In the mean time, we can see on the weekly chart below how extremely oversold GPRO has become. As such at least a bounce should be expected. Moreover, such oversold levels, after a bounce do often lead to a lower price low, with positive divergence on the TIs, which will setup the next advance. This fits with the 5-wave C-wave scenario. But the market will be the final arbiter and we’ll track it accordingly.

gpro 2

 

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