ROKU unable to break through key resistance level
Roku Inc. (ROKU) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
ROKU finished the month 32.92% higher at 154.89 after gaining $4.54 (3.02%) today, notably outperforming the S&P 500 (0.77%). Trading up to $2.49 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, ROKU actually lost -4.63% on the following trading day. Closing above Thursday's high at 154.02, the market confirmed its breakout through the previous session high after trading up to $4.23 above it intraday.
Daily Candlestick Chart (ROKU as at Jul 31, 2020):
Friday's trading range has been $7.13 (4.64%), that's slightly below the last trading month's daily average range of $8.32. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ROKU. Prices continued to consolidate within a tight trading range between 148.50 and 158.25 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns and one bearish pattern, the Bearish Hikkake Pattern.
Unable to break through the key technical resistance level at 157.28 (R1), Roku closed below it after spiking up to 158.25 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 148.50 where further sell stops might get activated. With prices trading close to this year's high at 166.18, upside momentum could accelerate should the share be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish High-Wave Candle" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Roku. Out of 7 times, ROKU closed lower 57.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 71.43% with an average market move of -3.08%.