While the recent performance of Roku stock may have some investors wary, there may still be some bullish signs to consider. The security has recently come in close proximity to its 50-day moving average, a level it has not touched in a while. Data from Schaeffer’s Senior Quantitative Analyst Rocky White shows that in the past three years, similar instances have led to an average drop of 7.9% one month later. If this trend were to continue, we could see ROKU drop to around $53.50, levels that have not been seen in about a year.
Despite the potential for a short-term drop, there are still indications of optimism surrounding Roku stock. The 50-day call/put volume ratio is currently at 2.24, ranking higher than 98% of readings from the past year. Additionally, the Schaeffer’s put/call open interest ratio of 0.65 suggests a call-bias among short-term premium traders. This indicates that there may be a strong belief in the securities’ potential for growth in the near future.
Options trading could be a viable strategy for investors looking to capitalize on Roku’s next move. The security’s Schaeffer’s Volatility Index (SVI) is currently at 52%, higher than just 9% of readings from the past year. This suggests that options traders are currently pricing in relatively low volatility expectations. Furthermore, Roku’s Schaeffer’s Volatility Scorecard (SVS) of 72 out of 100 indicates that the stock has regularly made larger moves than what options traders were anticipating in the last 12 months.
Overall, it seems that Roku stock is facing some uncertainty in the short term. The security has been on a downward trend for some time now, with a floor forming at the $56 level. With the stock currently trading at $58.07, there is a possibility of further downside in the coming weeks. Investors who are considering buying the dip on ROKU may want to hold off for now, as there could be more turbulence ahead.
Despite the current challenges facing Roku stock, there are still reasons to remain optimistic about its long-term potential. While there may be some bearish indicators in the short term, the overall sentiment towards the security remains largely bullish. As such, investors looking to speculate on Roku’s next move may want to consider options trading as a way to take advantage of potential opportunities in the market.
In conclusion, Roku stock has faced its fair share of ups and downs in 2024, with the security currently hovering near six-month lows. While there may be some short-term challenges ahead, there are still signs of optimism surrounding the stock. Investors who are willing to weather the storm may find opportunities to capitalize on Roku’s potential for growth in the long term.
