Roku Stock Could Soon Hit Fresh 2-Year Lows

The security has shed over 77% in the past 12 months

Digital Content Manager
Sep 20, 2022 at 1:46 PM
facebook twitter linkedin


It's been a tough run for Roku Inc (NASDAQ:ROKU) stock, which has already lost 69% in 2022, and more than 77% over the past 12 months. The security has stuck close to its July 29, two-year low of $62, with pressure forming near the $75 level  Those looking to buy the dip on ROKU should hold off for now, as things could become even more dire in the coming month. 

This is because the security just came within one standard deviation of its 40-day moving average, after a lengthy period below the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, Roku stock has seen six similar occurrences over the past three years. The equity was higher one month later just 17% of those instances, averaging a steep 12.2% drop. A similar fall from its current perch of $70.17 would put ROKU just above the $61 mark at a fresh two-year low. 

roku sept 20

Despite its dismal price action, analyst sentiment remains mostly bullish, which could leave the door open for a round of downgrades and/or price-target cuts. Of the 22 in coverage, 12 firms consider ROKU a "buy" or better, while the 12-month consensus price target of $82.30 is a 16.6% premium to current levels. 

For those looking to speculate on ROKU's next move, options could be the way to go. The security's Schaeffer's Volatility Index (SVI) of 76% sits higher than 35% of readings from the past year. In other words, options traders are pricing in relatively low volatility expectations right now. 

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners