GoPro Inc. (GPRO) and Fitbit Inc. (FIT) sell gadgets, a versatile moving camera and mount, and a wrist fitness monitor respectively.
Not much to say about these equities that is not obvious now and was obvious from the start — they have limited product lines that appeal to niche consumers who will buy fast and quit buying as quickly. Never fails that the stocks like these run up in a hurry on what is essentially a fad and fade as soon as the fad wears off and/or the market is saturated.
Which is why, once again, market timing and technical analysis prove their worth in profiting from both runs up and sells down.
With my latest short-term market-timing signal to sell the market and short stocks from the open of November 5th, GPRO has a short profit of 8.7 percent and FIT a short profit of 15.2 percent as of the close today. With the market oversold it is time to either tighten stops to protect profits or just take the money and run.
Should be noted that GPRO has been in a hard selloff of more than 50 percent since August and longer term shows no sign of stopping that decline. FIT is just coming back into its IPO day, a level it better hold or it’ll soon look like GPRO longer term.
(click on chart for larger image)