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How to Trade FuboTV's Wild Price Action After the Earnings Report

At Wednesday's high, FuboTV stock was up almost 50% from the prior day's low. What's going on with this wild mover?

FuboTV  (FUBO) - Get Report has been incredibly volatile over the past few days. Despite that volatility, the bulls are hoping that the bottom is in.

The stock is up about 10% on Wednesday after the company’s better-than-expected earnings report. Management also lifted its outlook, which is likely aiding the bounce.

But stocks broadly are under pressure on Wednesday, thanks to a hot CPI reading, triggering inflation concern.

That could keep the pressure on growth stocks, which are trapped in a painful bear market (but are trying to bottom).

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As for FuboTV, the shares are up nicely on the day, but are well off the highs when the stock was up 21%.

The rally comes after the shares broke to 2021 lows on Tuesday, before reversing and closing about 8% higher on the day. 

Based on Roku’s  (ROKU) - Get Report earnings report, there’s clearly momentum in streaming video, and FuboTV’s report adds to that conviction. 

Disney  (DIS) - Get Report will report on Thursday and investors will be looking to see how it does, too.

After the wild moves, let’s look at the charts for FuboTV.

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Trading FuboTV Stock

Daily chart of FuboTV stock.

Daily chart of FuboTV stock.

The move may not look like much on the daily chart above, but the fact of the matter is FuboTV stock is up 32% from Tuesday’s low. At today’s high, the shares were up almost 50%.

That creates a bit of conflict for traders. As traders, our top priority is risk management.

While it may be tempting to focus on the possible reward of a stock that’s still down 70% from its highs, we have to protect our risk flank, too.

Generally in a situation where we have a reversal, we’d wait for FuboTV stock to reclaim Monday’s low (which was $16.28), then use Tuesday’s low at $14.64 as our stop loss. While the stock did just that, earnings complicated the situation. 

That low — often referred to as a pivot — is our reference point. Below that and many bulls would no longer want to be long. With $1.64 a share in risk, it’s manageable. 

However, currently with about $5 per share in risk on a sub-$20 stock, it’s a much harder situation -- though we can simply reduce our position size to account for the wider risk range.

Regardless, we need this week’s low to hold. Below that and more downside can continue.

On the upside, let’s see if FuboTV can hold above $20.40. That keeps it above the 10-day and 21-day moving averages, but also above last week’s high. 

That gives us a weekly-up rotation and opens the door to the $23 to $24 range. Above that and $26 is possible.