Augury

ROKU Over Extended/Over Valued Short Idea

Short
NASDAQ:ROKU   Roku, Inc
ROKU has exploded as of late. After reporting very nice earnings numbers the market has pushed this valuation a bit too far too quick. Thinking a pullback here. Will start laying in short on a gap up. I will give my self a couple of points to build a position and will give some more on a wide stop out. While I agree earnings are nice, valuation is the only thing that matters and at the moment its a bit stretched on ROKU.
Comment: Captured a very nice move here. Seems there may be a little support in the 127-129 area. I will be enforcing a very tight stop on 50% of my position. If we see continued weakness (market may show weakness in reaction to rate cute) I will let the position pay me until the $115 area. Rebalancing here as the idea worked better than expected. I wouldn't be entering short on this move, near this area, so I won't be staying short here. A bounce to $150 may warrant another stab at short. From the current price of 130, we have 15 point downside scenario vs 20 point upside move to 150. Overall if the stock wants to pay me I welcome the idea I just have no interest in giving back a nice 20% move.

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