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Keep Riding the GoPro Inc (GPRO) Stock Wave!

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If that's what profit-taking and a "sell the news" reaction looks like, GoPro Inc (NASDAQ: GPRO ) shares are in good shape to continue climbing higher. And for like-minded bullish investors, a GPRO collar strategy offers an effective way to enjoy the ride with less risk and killer, forward-looking returns. Let me explain.

Keep Riding the GoPro Inc (GPRO) Stock Wave!

Action-technology outfit GoPro revealed its latest camera offerings Thursday, the Hero 6 and Fusion. The latter is a 360-degree camera which features GPS, Bluetooth and the ability to convert footage into regular formats.

The Hero 6 is the latest iteration within the Hero product line. It features video stabilization regardless of what the ground beneath your feet is doing and driven by GoPro's first proprietary custom image processor - the GP1. The camera also offers 4K video at 60 frames per second.

The latest from GoPro may be the greatest yet and help reboot the one-time hottest stock on the block. Yet Thursday's debut apparently wasn't enough for some. GPRO investors opted to take profits in action sometimes referred to as selling the news. Having said that, the reaction was very modest in the scheme of things and not exactly a video-worthy clip of bears in action.

GPRO Stock Daily Chart

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Technically speaking, GPRO has continued to make good on and solidify an emerging uptrend previously discussed one month ago.

Also inviting, for the first time in a couple years GoPro shares have put together enough momentum to establish a position of relative strength with a year-to-date gain of 27%.

Looking forward and maybe backwards a bit, GPRO remains $87 below its all-time-high of $98.47 set in late 2014 following a stunning "must have" post-IPO performance. That same frenzy helped fuel one of the more memorable bubbles in the market over the past couple years.

So, could GPRO's recently formed uptrend be the start of something much bigger for the company and investors?

Bottom line, the kind of hype associated with 2014 isn't likely to see a repeat performance. But that doesn't preclude today's GoPro from a sustainable rally towards $15 and even $20 a share over the next six to 12 months if all goes well with its new products.

GPRO Stock Collar Strategy

Courtesy of OptionVue.com

From our last at-bat, a proffered GPRO Jan $11 call has ballooned from 50 cents to $1.65 as of Thursday's close. The position also offers ample opportunity for profitable adjustments to reduce risk and lock in some type of guaranteed gain.

Reviewing the GPRO options board for fresh ideas, with implieds having firmed up over the past month and given our belief the uptrend can carry shares higher, I like the collar strategy as a means for bullish positioning with reduced and limited risk.

One favored combination is the Nov $14 call/$10 put. For $11.67 or just 20 cents more than purchasing shares outright for $11.47, the collar ensures if GPRO fails to improve on its second act, losses won't spiral out of control as protection is in place slightly below last week's pivot and uptrend low of $10.54.

And if GPRO stock puts camera-ready smiles on the faces of bulls? Above $14, the short call effectively caps profits at a healthy $2.33 or 20% at expiration; investors still enjoying the big picture for GoPro can always roll up and out with an adjustment and continue to ride the GoPro wave with less risk.

Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual.. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits and feel free to click here to learn more about how to design better positions using options!

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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