ROKU is down 70% from the previous "ATH" and is below a clear descending trendline; I'm really interested in this kind of name to look for opportunities in case a new bull run comes. My main thesis to support the idea that a new bull run may come is on the logarithmic chart.
As you can see, these big drops have already happened in the past, and after that, we observed massive bullish movements. So my view is that there are similarities between them and that past behavior may repeat again.
Ok, nice that these mean that we should buy now? Of course not; that's why we use technical analysis to detect common patterns between all these past situations and try to find which would be the most efficient way of trading this "opportunity." My conclusion is that I want to observe breakout followed by a correction in the daily chart of 7 to 12 days and a clear 10% retracement.
IF that happens, then I will be interested in trading on a new local high in the same way you can see on the chart, with a target on the next major resistance level.
What happens if the price keeps falling? Then I will not trade, and I expect a move towards the next support. From there, I will look for the same setup I'm mentioning here.
Thanks for reading! Feel free to share your view and charts in the comments!
As you can see, these big drops have already happened in the past, and after that, we observed massive bullish movements. So my view is that there are similarities between them and that past behavior may repeat again.
Ok, nice that these mean that we should buy now? Of course not; that's why we use technical analysis to detect common patterns between all these past situations and try to find which would be the most efficient way of trading this "opportunity." My conclusion is that I want to observe breakout followed by a correction in the daily chart of 7 to 12 days and a clear 10% retracement.
IF that happens, then I will be interested in trading on a new local high in the same way you can see on the chart, with a target on the next major resistance level.
What happens if the price keeps falling? Then I will not trade, and I expect a move towards the next support. From there, I will look for the same setup I'm mentioning here.
Thanks for reading! Feel free to share your view and charts in the comments!