Everybody wants to be healthy and fit, which means you have to be aware of how much exercise you get. Lots of people hardly get any movement during the day when you’re sitting in an office for the whole day. Fitbit is one of the wearables that can help you become more aware of your activity during the day.
It keeps track of your steps when you walk or run and shows you how far you’d still have to go to get enough exercise. By getting more aware of how much you move every you’re soon going to be doing more and more to beat your own personal records, or to round the number of steps of that day. Nobody wants to finish the day with just 9,689 steps, you’ll push it up to 10,000 by another walk around the block.
I believe Fitbit is bigger than just a sportstracker and wearable. They’re focused on living well and being healthy which is a growing part of our lives. More and more people are aware of the importance of taking care of their health. So although Fitbit is doing great at the moment as the fastest growing accessory company at the moment, it has a much brighter future ahead.
So company-wise I believe Fitbit will be a great investment on the longer term. But when I look for longer term investment on growth companies I also base my buy point on the chart history. Since Fitbit has just a small chart of a few days it is most likely not to make it to my longer term list at this moment.
For now I’m focused on trading Fitbit for the shorter term. When the trade works out well I’m probably going to hold on to a part of my position for the longer term and take profits on the rest.
Chart Analysis
Let’s take a closer look at the last two weeks of trading on the hourly chart. Because it’s only have been trading publicly since June 18th the daily chart doesn’t give me enough information to base my trade on that.
Also the lack of a real trading history makes me cautious when taking a position because there is not that much to base my buy and sell prices on.
On the other hand, the short history of stock prices help the few support and resistance prices to become really strong indicators.
In the first days of trading Fitbit surged all the way up to $40. That’s an amazing 50% profit from it’s IPO price at $20. The stock dipped intra-day right after showing some hesitance by not being breaking through the $40 price.
The next day, June 23rd, closed red as the first traders were taking their profits because of the weaker signals from the day before.
By testing this price level twice in a couple of days it showed me that this is now the most important resistance price to look at in the near future. The next days more traders were taking their profits as it couldn’t go higher for now.
The trading volume dried up in these days which is a bullish sign to me. It shows that there are fewer people willing to sell their stock for the current price.
On June 29th Fitbit found solid support at $33. On the hourly chart it shows that this price has been the resistance level on the second trading day. Testing former resistance as a new support price is another bullish sign.
The next day it gapped up because of several news articles like Insider Monkey reporting that Fitbit had landed its first major investor out of the IPO gates in the – form of John Griffin‘s Blue Ridge Capital. They disclosed owning an 8.32% stake in the company consisting of 3.50 million shares. And it’s got it’s first price target from RBC Capital’s Mark Sue initiating an Outperform rating and a $45 price target. Besides that Jim Cramer spoke bullish about Fitbit as well.
This day showed an increase in trading volume compared to the down days earlier. It started getting back to the former $40 resistance price, so I was watching it closely.
Right at the open of the 1st of July it trading above $40 and started testing $42 intra-day as next resistance. After finding new support at $40 I decided to buy. Great bullish chart showing to me that it will continue to go higher and showing solid support at $40. In the end of the day it even broke out $42.
The day after my buy it started to continue it’s uptrend perfectly and trading around $44 for a while. After dipping in the second half of the day it found support at $42, which has been the resistance on the day before. Again giving me another sign of strength.