Cup and Handle Breakout in Roku?

Roku was one of the market’s most explosive growth stocks in 2018 and 2019. It’s chopped around with the rest of the Nasdaq during the time of the pandemic, however recent price action shows some interesting relative strength.

First, ROKU made a new 52-week high on Monday, even as the Nasdaq-100 hit a two-month low.

Next, ROKU bounced at its 50-day simple moving average (SMA) several times this month.

Third, the stock has two near-term support zones in play: The early-September high around $180 and the and the recent area between $170-175. Depending on the state of the market, a deeper test shouldn’t be ruled out.

Finally, the longer-term chart shows a cup-and-handle on ROKU. March’s low is the “cup,” followed by the “handle” in June.



Fundamentally, ROKU has some catalysts. Monday’s rally came after the company reached an agreement with Comcast over NBC Universal’s Peacock App. Even before that announcement, ROKU announced strong results on August 5, with earnings, revenue and subscribers all beating estimates.

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