Chart of the Day: Roku Inc. (ROKU)

Last Friday Roku Inc. (ROKU) broke a key resistance level.  Now, I’m waiting to see if that resistance level will turn into support…

Roku Inc. (ROKU) operates a TV streaming platform that allows users to discover and access a variety of movies and TV episodes, live sports, music, and news. The company operates in two segments, Player and Platform. It derives revenue from the Player segment through sales of its streaming devices. The Platform segment consists of fees from advertisers and content publishers. Revenue soared in its most recent quarter due to a surge in premium subscriptions driven by the coronavirus lockdown.

Take a look at the 1-year chart of ROKU below with added notations:

Chart of ROKU provided by TradingView

On two separate occasions over the past year, ROKU had hit resistance at the $170 level (green). Now that the stock has broken above that resistance, higher prices should follow, and $170 will likely become a new support. 

The possible long position on the stock would be on a pullback down to that level with a sell-stop order placed under it. A failure to hold $170 could negate the expectations for a higher move.

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Christian Tharp, CMT