Roku stock has been a monster this year, rallying 300% in 2019 and 350% from its Dec. 24 low. The rally has humiliated Roku's detractors that continually say "any company can make a streaming stick" or that Alphabet (GOOG) - Get Report (GOOGL) - Get Report , Amazon (AMZN) - Get Report and Apple (AAPL) - Get Report will eat Roku's lunch.
Clearly, that hasn't been the case and Roku's recent quarterly results prove as much.
The company lost 8 cents per share, but that easily topped expectations for a loss of 21 cents per share. Revenue of $250.1 million smashed expectations by more than $26 million (a beat of more than 10%) and grew almost 60% year-over-year.
Roku's third-quarter and full-year revenue guidance came in ahead of Wall Street expectations, too.
It appears that not only does Roku have momentum, it has accelerating momentum. A look at the charts suggests the same thing, as the name continues to force its way higher. Can the move continue?
Trading Roku Stock
Navigating a stock that's up four-fold in eight months is not easy. However, Roku stock does not appear overheated. At least, according to the metrics.
When looking at the momentum-measuring MACD reading at the bottom of the chart (blue circle), it shows that momentum is just turning in bulls' favor. A look at the top of the chart highlights the RSI measure (also a blue circle). This metric shows the overbought or oversold state of a security. With a sub-70 reading, Roku stock is not approaching a short-term overbought state, to much surprise.
So far this year, the stock has put together massive post-earnings runs, but tends to consolidate for the next few months.
Roku stock appears to be breaking out of short-term channel resistance (purple line), but has a ways to go before running into longer-term channel and uptrend resistance (blue and black lines).
To get there would require a move into the upper $130s and possibly the lower $140s. Incidentally, Roku stock does have a Fibonacci extension in the $144 area now.
I'm not saying Roku will rally this far in the next few days. Doing so would require a rally of at least another 12%. But given the run Roku has been on, I wouldn't put a move to this level out of the realm of possibility, particularly if the market can harness some continued bullish momentum.
Remember, this stock has a float of just 82 million shares. Exacerbating the move isn't hard to do with a low float, especially if some deep-pocketed investors get involved. On the downside, I want to see the prior range highs near $110 to $113 hold as support.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.