Are you ready to rock on Roku (ROKU)? See you tomorrow morning! (August 08, 2018)


Roku ( NASDAQ: ROKU ); the slam on these guys was that they weren’t able to grow their subscriber base, there was a lot of competition, that type of thing; right? There IS a lot of competition. Google ( NASDAQ: GOOG ) has a lot of competition in what they do too. Apple ( NASDAQ: AAPL ), they have a lot of competition in what they do. Netflix ( NASDAQ: NFLX ), yes. Amazon ( NASDAQ: AMZN ), yes. All of those; those are big game-changing companies. Maybe Roku ( NASDAQ: ROKU ) is, maybe it isn’t.

I remember one time when I was standing in a Blockbuster Video store in Encinitas, California, waiting in a long line because they had one register that was manned by a guy with a nose ring and big wide-opened earlobes, working so slow. I went up to the counter (I was just kind of grumpy that day), I put the disk on the table and as I was walking out I said, “Hey, one word, Netflix.” That was then, this is now.

So what I am telling you is, on Roku ( NASDAQ: ROKU ), they are starting their own free TV, they are doing a streaming video service. They have a lot of stuff going on and that is what the numbers reflected here when the company reported earnings. It always gyrates around like does but then ultimately this stock, and you can see when I am doing this stock, time, 6:27 Eastern, the stock is still up above $50.00. Traders like these numbers. They beat their earnings, they raised guidance, it’s all good now. So I think this should be a good 59-minute trade tomorrow.

Now typically, on something like this, you see a stock gap up 10 percent, this is only 8, but you see a stock gap up 10 percent and you think, Okay, I’ve got to fade that. I want to short into that. Or a stock gaps down. I’ve got to fade that, I want to buy into that. This may or may not be the case with Roku ( NASDAQ: ROKU ). We could very easily see Roku ( NASDAQ: ROKU ) trading right around this level tomorrow, flutter around like it does and then ultimately blast off. Look at this chart: Forget about the fact that the stock gapped up here. If this was just another day at the factory, the chart factory, it’s kind of too long to be a textbook cup and handle but the dynamics are the same.

The point is, this was in a massive uptrend. It settled out, pretty deep settling if you want to call that from a 60.00 top down to a 30.00 bottom, yes; that is about 50 percent the last time I checked. Now the stock is back up here; forget about earnings. If the stock broke out above this level I would look at this and I would have no problem at all saying, “You know what? This stock breaks out above $53.00, $55.00, it could go to $80.00.” I would have no problem making that call. I am not saying that it is going to do that, nobody knows. But I am saying that there is AT LEAST a 50/50 chance, let’s leave it at that; there is a 50/50 chance that this stock would gap up and then ultimately keep going; I call that a gap and run (very inventive I know), as opposed to a gap and crap.

We are going to be looking at this tomorrow and one thing I am pretty sure about and that is, if the stock opens up here at 51.30 it is not going to stay there throughout the day. It will take 2, 3, 4, 5-minutes, maybe longer, for the stock to find a trend one way or another. But once that trend is established I think, on a stock like Roku ( NASDAQ: ROKU ), this can make a move.

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