EOT Trade Alert – August 26, 2015

Trade Alert:

Buy GPRO October 16th 2015 $52.50 calls at $2.20 or better

 

Company Background:

GoPro (GPRO) sells cameras and accessories and is designed to capture, manage, share and enjoy meaningful life experiences.

 

Short-Term Catalyst:

GRPO is a momentum stock.  It runs hot and cold.

The people that use and enjoy their devices are vocal proponents of the company’s cool tech.  And the company has big plans to build on this enthusiasm to build awareness and demand for their products.

And the analysts are excited about what they see coming down the line in the near future for GPRO.  The consensus estimate for GPRO has shot from $1.15 to $1.38 over the last few months.

Nevertheless, the recent market correction sent shares of GPRO reeling… The stock is down 25% in the last month.  Needless to say, I think this is a bit of an overreaction.  The stock is oversold and due for bounce.

GPRO has the potential to shoot back up to $52.00 in short order… even if the overall market doesn’t find footing in the weeks ahead.  And if the market does stage a comeback, then GRPO could be north of $60.00 before these options expire in October.

Let’s use the recent market selloff to grab some cheap call options of this momentum growth stock that could generate a double or triple bagger over the next month or so.

 

Trade Details:

Underlying Stock Symbol:	GPRO
Current Bid-Ask Price:	$2.03 – $2.13
Option “Buy Up To” Price:	$2.20
Break-Even On Stock At Expiration:	$54.70
Maximum Risk Per Contract:	$220

 

Exit Strategy:

GPRO is trading at $45.90 per share.  Resistance levels will be at $52.00 and again at $60.00.  Remember, we want this stock to move higher.  Support levels will be at $42.50 and $37.50. Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.

 

Chart:

 

Category: EOT Trade Alert