Fitbit Stock Moves Toward Support as Wearables Waver – Investopedia


Shares of Fitbit, Inc. (FIT) occupy moved off of their lows in late June, but the rally is quickly losing steam after breaking out from the 50-day moving average. While the company still has a loyal customer base, Bloomberg reports that the loss of key employees, an unready app store, lack of interest among developers and a failed Spotify partnership could hinder its widely anticipated smartwatch launch planned for later this year.

The market for wearables – including smartwatches and activity trackers – has always been choppy. In addition to Fitbit, GoPro, Inc. (GPRO​) has struggled with releasing unusual products, and Garmin Ltd. (GRMN​) reported a lower activity tracker volume during its latest quarter, which was only partially offset by strong growth in advanced wearables with GPS. Even Apple Inc.’s (AAPL​) Apple Watch has been underperforming early expectations. (See also: Samsung Passes Fitbit in Wearable Device Market.)

Technical chart showing the performance of Fitbit, Inc. (FIT) stock

From a technical standpoint, Fitbit shares occupy been trending sideways near R1 resistance at $5.71 for the past week. The stock remains in the middle of its short-term price channel, with support near the 50-day moving average, pivot point and lower trendline at $5.30 and resistance at the upper trendline around $6.00. Despite the short-term uptrend, the medium- and long-term trends remain bearish as the company struggles on a fundamental level.

Traders should watch for a rebound from lower support at around $5.30 or a breakout from upper resistance at $6.00 on the upside. On the downside, traders should watch for a breakdown from support to S1 support at $4.91 on the downside, which could lead to a unusual 52-week and bar not any-time low for the stock. A moving average convergence divergence (MACD) crossover could predict this trend reversal over the coming sessions. (For more, see: Fitbit’s Smartwatch Project Is in Turmoil: Report.)

Charts courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned apart from through passively managed index funds.



Source link