Why GPRO is soaring and overvalued.
GPRO is soaring today up another 5%-7%. Look at the fact that the stock is now up 250 + % since it’s IPO.
I want to jump immediately to my point that I echo Josh Brown off CNBC and say, “if this was a stock I wanted this is not where I would get in” The valuation is absolutely insane.
GPRO doesn’t earn a profit yet, their sales are close to a billion annually. And the stock is trading as if they are making sale of $7 billion with a 12%-20% margin of profit for shareholders. This stock is way way overvalued, but you must respect that chart. Straight up and to the right.
In my past observations I have seen stocks like this peak out with this same “look” 90+ RSI, multiple days of gain etc.
Here’s what the chart looks like. Trade lightly friends… this could get messy.
By the way… while the easy money has been made in this stock, there’s plenty of other opportunities like this in small-cap stocks.
As you can see in the chart above, there’s a particular setup I’m highlighting called the L1L2 setup – it’s a text-book example above.
If you want to know more about the L1L2 setup, take my traders survey below, and let’s hop on a call and talk about this setup.
All my best,
Ben – CSquared Trading