Roku (ROKU) - Get Report  ticks me off a little.

I am not angry at anyone, except myself. Perhaps, it's my own paranoia, but I don't like to enter orders ahead of time for fear that sniper algorithms and the high-frequency freaks will spot my order and clog the lines. As an old open-outcry trader, you might say that I feel some resentment toward the modern forces that in my opinion have badly perverted the purity of price discovery. 

Long story short. I could smell a good second quarter for Roku coming. Call it gut. I don't know. My intent was to buy a few shares in the seconds ahead of the bell. I got a little busy trying to cover my Tesla (TSLA) - Get Report short at price higher than I will likely get this morning (my basis is $373.12 on that one), and then my fingers were not fast enough to get the Roku purchase in. You know, I once turned a triple play (two put-outs and an assist) in Little League, so I guess life really does even out.

Full Coverage:

Roku closed at $47.25. Then, the firm broke even for the second quarter, which beat earnings expectations by fifteen cents. Revenue printed up 57.4%. The firm raised full-year guidance for revenue. Account activation soared 46%. Streaming hours ramped 57%, and this is the biggie... average revenue per user rose by 48%, Nicely executed, Roku.

CFO Steve Louden was nicely bullish in an interview with TheStreet's Executive Editor Brian Sozzi. 

The last sale that I see with my window still black with the dark of night is $53.10. I wanted in. I am not buying it here, or at least not here this morning. However, I am not one to be without a plan. Let's see if we can figure this out.

My Technical Analysis

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You can see that Roku pretty clearly colored within the Fibonacci lines twice. Once retracing the move higher over the winter, and once retracing the decline over the spring. Then the Pitchfork formed into summer. The name obeyed its technicals.

When the bell rings this morning, momentum will move price toward the center of the Pitchfork's lower chamber. Relative Strength and the daily MACD will confirm what Money Flow already told you.

  • Target Price: $67.50
  • Last Close: $47.25, Last Sale $53.10
  • Preferred Entry Point: Last night's close

The (Possible) Trade

We may have to be patient in order to get the right price for this one, unless you want to staple your order to your forehead and walk into a buzz-saw. My plan is to let the bell ring. Let the equity and options markets open. Last night $47 puts expiring this Friday were still paying $3.21. That price will be closer to zero this morning. Roku reports again in early November.

My plan is to watch premiums for puts expiring on October 19 (the date just gives me chills even 31 years later). If I see a premium that would bring my net basis (if assigned) below last night's close, I am likely to make a sale. If not, or if the stock behaves poorly in the early going, I'll just wait. Nothing wrong with a "nothing done" if it doesn't feel right. In that case, maybe I buy equity.

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At the time of publication, Guilfoyle was long AMZN.