Roku actions (ROKU) – Get the report were hitting new all-time highs on Friday, up about 3% so far today.
The momentum comes after the stock jumped more than 10% on Thursday. If Roku can end Friday’s session in positive territory, he will have rallied four of the last five sessions.
What gave him the spark? About two weeks ago, Roku reported strong earnings, which pushed the stock 12.5% that day to new highs.
While stocks couldn’t maintain those gains over the next two days – which was a real gift for anyone who took the time to read the press release carefully – it set the tone that the bulls had the control.
Within days, Roku’s stock had recovered, setting it up for Thursday’s high as it hit new highs again. This came on the news that AT&T (T) – Get the report HBO Max was trying to come to the Roku platform, a move HBO Max recently made on Amazon (AMZN) – Get the report First.
The fact that AT&T was withholding its HBO Max content from Roku and Amazon – the two major streaming platforms – as if it was going to be fine without them is practically laughable at this point.
But at this point in the game, that’s not the point. The point here is that Roku is at new heights and the rally may not be over.
Amazon is a stake in Jim Cramer Action Alerts PLUS Members Club. Want to be alerted before Jim Cramer buys or sells AMZN? Find out more now.
The daily chart above does a good job of highlighting what a busy month it has been for Roku action. Now above his post-profit high, the bulls want to see if he can continue to rise.
If Roku can keep pushing higher, let’s see if it can get into the $ 295- $ 300 range.
If techs measure from March low to all-time 2019 high, extending the lineup twice kicks in near $ 295. If they measure from the March low to pre-coronavirus highs in 2020, the 261.8% extension kicks in at $ 301.64.
In other words, that stock – which isn’t even considered overbought by engineering standards – could still have plenty in the tank for higher thrust.
If that doesn’t turn out to be true, we also need to factor in Roku’s drop levels.
The first line in the sand is the $ 240 breakout level and the 10-day moving average. A fall to this level will likely involve the uptrend support (blue line). If the Bulls are really in control of Roku, this area should trigger a decent bounce.
If this fails, we may eventually see a test of the 50-day moving average, which has been providing solid support since late June.