Roku Stock Chart: Will Streaming Rise or Crash on Earnings Report?
Investors don’t need much more proof than they already have that we are in a bear market for growth stocks. And Roku (ROKU) – Get the Class A report from Roku, Inc. the actions were taken under pressure.
Shares of the streaming equipment major are currently down about 70% from their all-time high just a few quarters ago. Even today, the stock is down nearly 7% as investors worry about the stock’s reaction to tonight’s earnings report.
The race has been brutal for the past few months and the uncertainty is making it even more difficult.
From a macro perspective, what will happen to stocks like Roku if selling pressure continues in the broader market?
From a micro perspective, investors need to wonder if Roku will react like Upstart Holdings (UPST) – Get the Upstart Holdings, Inc. report. and skyrocket on revenue or will it react like Shopify (STORE) – Get the Class A report from Shopify, Inc.Quickly (FSLY) – Get Fastly, Inc. Class A Report and so many others?
However he reacts, it helps to know the levels in advance so we can react (or not react) depending on the action.
Trading Roku Stock
When Meta (Facebook) – Get the Class A report from Meta Platforms Inc. declared profits a few weeks ago, it crushed Break (BREAK) – Get the Class A report from Snap, Inc. to the point that the latter was almost down as much as the old one. You would have thought Snap reported the wrong results.
Snap fell about 24% the day it released its post-close report, then exploded 59% the next day when investors realized the company was doing quite well.
A bit of that sentiment is setting in with me regarding Roku, which is breaking below uptrend support due to poor reactions from other growth stocks following their quarterly results.
Of course, the obvious difference is that Roku isn’t plunging 20% on a peer’s earnings report and hitting new lows.
From the chart above, it is clear that the mid $140 was important. But I will be watching the $139.50 area, if Roku sees a bearish earnings reaction. This is the low of the last month, and losing this level would give the stock monthly downward rotation.
This could very well bring into play the $125-$127 zone, where Roku’s first day of trading VWAP comes into play.
On the upside, bulls will want to see Roku stock clear the 10-day, 21-day, and 50-month moving averages. Above $165 will bring the $178 zone into play, then the monthly VWAP and the descending 50-day moving average.
I find it hard to believe it will be north of $200 by the end of the week, but if that’s the case, we’ll have to reassess Roku’s stock.