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Tuesday, August 03, 2021 2:53:29 PM
Roku Inc (ROKU) Pulls Back to Bullish Trendline Before Earnings
By: Schaeffer's Investment Research | August 3, 2021
• The 40-day moving average has been bullish for the stock in the past
• The stock has a split post-earnings history in the past couple years
The shares of Roku Inc (NASDAQ:ROKU) are down 1.3% to trade at $416.00 at last check, ahead of its second-quarter earnings report, due out after the close tomorrow, August 4.
The equity is expected to post profits of 13 cents per share, and has a split post-earnings history -- closing half of its next-day sessions higher during the past two years. The security has averaged a post-earnings swing of 10.7%, regardless of direction. This time around, the options market is pricing in a slightly bigger move of 12.4%.
On the charts, ROKU has pulled back from its July 27 record high of $490.76. However, this fall has the stock within one standard deviation of its 40-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, 10 similar signals have occurred in the past three years. Roku stock enjoyed a positive return one month later in 67% of those cases, averaging a 12.6% gain. From its current perch, a comparable move would send the stock back toward its recent highs.
Yesterday, Morgan Stanley threw in a price-target hike to $325 from $300. However, the firm kept an "underweight" rating on the shares. Analysts are mostly optimistic, though. Of the 20 in coverage, 17 consider the stock a "buy" or better.
Meanwhile, now looks like a good time to weigh in on Roku's next move with options. The security's Schaeffer's Volatility Scorecard (SVS) sits at a high 95 out of 100, meaning ROKU has exceeded option traders' volatility expectations during the past year.
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By: Schaeffer's Investment Research | August 3, 2021
• The 40-day moving average has been bullish for the stock in the past
• The stock has a split post-earnings history in the past couple years
The shares of Roku Inc (NASDAQ:ROKU) are down 1.3% to trade at $416.00 at last check, ahead of its second-quarter earnings report, due out after the close tomorrow, August 4.
The equity is expected to post profits of 13 cents per share, and has a split post-earnings history -- closing half of its next-day sessions higher during the past two years. The security has averaged a post-earnings swing of 10.7%, regardless of direction. This time around, the options market is pricing in a slightly bigger move of 12.4%.
On the charts, ROKU has pulled back from its July 27 record high of $490.76. However, this fall has the stock within one standard deviation of its 40-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, 10 similar signals have occurred in the past three years. Roku stock enjoyed a positive return one month later in 67% of those cases, averaging a 12.6% gain. From its current perch, a comparable move would send the stock back toward its recent highs.
Yesterday, Morgan Stanley threw in a price-target hike to $325 from $300. However, the firm kept an "underweight" rating on the shares. Analysts are mostly optimistic, though. Of the 20 in coverage, 17 consider the stock a "buy" or better.
Meanwhile, now looks like a good time to weigh in on Roku's next move with options. The security's Schaeffer's Volatility Scorecard (SVS) sits at a high 95 out of 100, meaning ROKU has exceeded option traders' volatility expectations during the past year.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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