GoPro was one of the notable decliners in trade today. The stock declined by close to 3 percent on the back of above average volumes which is a negative sign. The price action on the back of above average volumes is a clear indication of the shift of momentum towards the sell side. It is important to state that GoPro has been one of the biggest decliners over the past month and has underperformed the broader indices which is seen as a bearish sign. The stock has declined by close to 33 percent since September.
Many analysts on the street believe that comments from Ambarella, a major supplier of GoPro’s semiconductors that it would report lower revenues from its action camera division are one of the key reasons for the decline in GoPro. Many investors believe that the comments from Ambarella is a direct indication that GoPro would not introduce any new products in the all important holiday season which would be a huge negative for the company. It is important to state that the newest product introduced by GoPro earlier this year hasn’t received great reviews which is a cause for concern for investors on the street.
When looking at the charts for GoPro, the stock has been in a strong downtrend since the beginning of the year. The stock has been forming lower lows and lower highs which is indicative of the fact that bears are in total control at the current moment. Traders believe the stock could head to levels of $25 in the near term. The stock currently trades below all important daily moving averages which is a bearish signal. The relative strength index for GoPro have given a sell signal which is indicative of the lack of inherent strength which is a cause for concern.