Looking at Roku ($ROKU) in multiple timeframes gives you a singular trade approach. (July 23, 2021)
ROKU
I want to look at Roku ( NASDAQ: ROKU ) today. Not like the device for looking at your TV but the actual stock, we are looking at a weekly chart. I really like the way this stock is trading. It is actually my second largest position and I don’t have that many of them but this is a big one.
The reason is because this stock, in this time frame, we will look at a daily time frame in just a second. But I have not seen this type of pattern, again, on a weekly chart, I haven’t seen this type of pattern where the next move is down, Maybe for a day or two, maybe even for next week, but this type of pattern, from everything that I recall, my memory isn’t that great, but from everything I recall the move in this type of stock has generally been higher.
They report earnings in a couple of weeks, on the 4th, so that could all change. This is a pattern that I am familiar with, that looks like this. I can just kind of leave it at that, that is why I am long this stock. We can draw kind of a line there, it’s got a nice breakout. I wouldn’t really call it a volatility squeeze but it is certainly a stock that has kind of pinched a little bit.
Now, on the daily chart, I know this has got lines all over the place, I can take these off, but I have been focusing on this on a fairly regular basis with the members at Stock Market Mentor. We’ve been in it for about 100 points, we didn’t get it at the low but anyway, I am going to go ahead and remove this mess.
I was looking at this stock and we were stopped out of this just Monday, I think it was actually last week. And I think I probably had the stop set too tight, I have to acknowledge that, but then when the stock turned around I said, okay, I typically don’t see a stock that has fallen like this, like this fast. You don’t typically see it be like a “V” shaped thing here, which is actually what this is turning out to be.
You typically see it kind of meander around, kind of wallow around, and form a new base. And so I didn’t really feel like getting back into the stock simply because this setup didn’t look the greatest. A lot of times you are going to get stopped out of a stock and then you will say okay crap, I was wrong to get stopped out I have got to get back in, so you will get in again. That’s called being shaken out, where you are in a stock, oops, then you get out, stopped out. Got scared, sold the stock, and then right away, oh, I need to be back in. And you can get shaken out 2 or 3 times.
For me personally, if I get shaken out twice I am not even going to stick around for the third time. I am just going to declare defeat, even if I am snatching defeat from the jaws of victory, if I get stopped out twice then I think there is obviously something in my approach that’s not working. It’s not the stock’s fault, it’s my fault and that’s just a part of trading, it’s going to happen. With this, that is what I was looking at, hey, maybe we will get a second bite at the apple. But it’s looking to me like the apple is not giving us a second bite.
And so I am looking at this now, we see what the daily chart is like. You could say, that’s a cup and handle, and I guess you could. There’s the cup, there’s the handle here, now we get a breakout. But for my tastes this is a pretty sloppy cup and handle but you could say that. I would just say, this is actually turning out to be a good setup. But when I look at this on the weekly chart this is, again, another stock that I just haven’t seen a chart do this, typically, you see it move higher. And so that is why I am looking at Roku ( NASDAQ: ROKU ) and so maybe you will too.
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