Hi Guys. So i am always on the lookout for Macro trend setups, signs and opportunities. I believe ROKU is potentially in a position to take a nice swing.
This analysis is on 1 day.
Notice we have reached a Sloping Support trendline from December 2022.
We've had 2 touches previous that resulted in bounces.
Trendline theory states trendlines can stay intact for atleast 3 touch points.
Owing to the idea that our recent touch point is a solid area to take positions. Has a decent probability of a bounce.
On top of that we have the Blue horizontal trendline, which acts as an added layer of Support.
Incase the black trendline does not hold, this would be next lvl.
Stop loss/limit should be placed below trendlines based on risk tolerance. Small positions can have a larger % loss, vise versa.
Now to Support my theory of this buying a solid area to take positions.
I have 3 indicators.
RSI which is in Oversold conditions after 3+ months.
On top of that the momentum indicators MACD and STOCH. Are also oversold.
MACD is signaling a waning bearish momentum. As seen by the light red histobar prints. We are looking for and eventually should see Green bars and a bullish cross. Which can bring in necessary demand we need for bounce.
Also STOCH RSI is below the 20 lvl, but crossing Bullish as we speak. This must continue and a bullish cross ABOVE 20 lvl, will also bring in demand and help with bounce.
If we see bullish changes in the momentum indicaotrs, i believe there would be a even higher probability of prices bouncing.
So pay attention, be diligent and manage risk accordingly. __________________________________________________________________________________ Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on ROKU in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
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Todays candle looks strong with a lower wick indicating demand here. Continue to monitor this area.
If we hold as Support.
My Targets are seen.
Target 1 = 1st Gap above Target 2 = 2nd Gap above Best case scenario Target 3 = We travel back to the resistance trendline that pushed us down.
I would be looking to get rid 50% of my position on 1st target. 25% on 2nd and 25% on 3rd. (example of selling strategy)
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QUICK UPDATE:
We are still consolidating in a tight range. But note we may have a higher low support area built.
I am still supportive of the idea this is a great area to take positions. With stop losses placed below MAJOR SUPPORT. (not financial advice).
Any move above $66 with confirmation is breakout out of the consolidation range.
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Likewise, any Confirmation BREAK BELOW 61.00, would be a continuation of downtrend.
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ROKU Update.
We have been rejected from an attempt to break out ABOVE consolidation range.
MOving back down towards bottom border.
We are still chopping up and down inside this consolidation rectangle.
A confirmation of a break ABOVE or BELOW is needed. That would now be the IDEAL trade scenario.
Best to not trade within this range for now.
Note a break down is also likely. If it does occur. It would be a continuation pattern of the downtrend.
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We are now ABOVE the 1 month long consolidation zone between $61.00 - 66.00
Watch for confirmation of the breakout.
We are also facing resistance from the 21 EMA highlighted by purple Moving average.
This will be tough to move past the first time around. So potential for rejection possible, back into consolidation zone.
But ideal situation is to get ABOVE 21 EMA and confirm both EMA and top of the consolidation zone as Support.
If we get these 2 confirmations. I will be looking to add to my long position.
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MAJOR UPDATE. WARNING.
We are breaking below the consolidation range, with an ENGULFING Bearish Candle.
If we confirm next week below the consolidation zone.
Next lvl is $56.00.
If we stay inside consolidation orange box end of next week, we would keep our move intact.
Week of 4/8 is KEY.
This is why you never trade inside chart patterns. Again, if we confirm below consolidation range. Taking a short may become a more ideal trade.
Lets continue to observe.
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After the breakdown from the tight consolidation range. ROKU has come down to test support at around $56.00.
We then attempted this week to get back into consolidation range and get back above the 1+ year Support trendline.
However, Large upper wick shows Sell pressure and a REJECTION.
It is crucial for ROKU to maintain the $56 lvl.
We are also forming a inverted hammer/ doji. This could indicate an attempt to reverse here from our price declinees from the highs.
Honestly, the fact that it's broken beneath the Daily support does not bode well. New resistance.
SafofAllTrades
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@DawnTrader22, Yeah absolutely does not. But breaking down also means New Support. We need to then assess if the new support lvl has enough demand for a bounce to push us back ABove the previous support we broke. So far we are maintaining $56 lvl as Support. Indicators are Oversold on 1 day. Need to see increase in volume.
RoperJ
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@SafofAllTrades I appreciate your thought out explanations. Definitely earned a follow
kuik2285
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did you note the rising RSI on the daily chart while this price has consolidated for a month plus?
SafofAllTrades
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@kuik2285, Yes. Noticed it. Can be a fakeout where RSI can come back down. Was hoping for bullish divergence to form with a drop in price. But currently some signs of momentum picking up has occured like a MACD deeper green bar print today and STOCH RSI not crossing bearish yet with potential to cross bullish again occuring. Need to wait. Better to trade this with a breakout above consolidation range we are in, that would give me more confidence to take more positions till then small position with stop below consolidation range.