Hello everyone! Welcome to another edition of “What Makes this Trade Great”. Today, we’re going to take a thrilling dive into the world of stocks and trading, using a specific example that really caught our eye — the case of Roku. Feel free to explore my Home Page, where you can acquire Trade Ideas scanners at a discounted price of Use Promo Code BARRIE15

The Earnings Play That Rocked The Stock Market

So, Roku. If you’re wondering where it came under the radar, well, it popped up in one of my pre-market scans. It was quite a significant earnings play. We’ve seen many such earnings plays in the market, but this one was particularly intriguing.

To give you some context, an ‘earnings play’ in the stock market is where investors anticipate the results of a company’s earnings report and make their moves accordingly. Roku’s earnings play for this instance happened the week of July 31. You’ll see that Roku almost hit $100 during that week, a pretty significant threshold for this stock.

An interesting thing to note was that we were closely monitoring Roku on the day it released its earnings report. Oddly enough, it didn’t live up to the expectations and gave up most of its gains soon after. This trend continued with many other stocks in the market.

Insights from Past Earnings Unveiled

Roku’s poor performance after its earnings release might have made some investors wary. But the interesting part is, it didn’t matter all that much. Every time a company releases earnings, there’s an element of unpredictability that comes into play.

The day after the release was particularly interesting. Even though it was just one day on a weekly chart, Roku’s stock, with 123,000,000 in the float, shot up by 32%.

The potential for growth is quite enormous. From the weekly chart, it’s evident that it could climb back up to around the $88 – $90 range. And although this is not an immediate forecast, given the volatile nature of the stock market, it can be expected over a certain period, granted the market remains as bullish as it is now.

The Stock Market Rollercoaster

The unpredictability isn’t just limited to Roku though, the same holds for the entire market. For instance, the SPY recently recovered from its 200-day moving average of 423, showing a surprising amount of resilience. It managed not only to bounce back from a low of 409 but also powered forwards in the next five days.

Consequently, this case study with Roku brings to light a crucial observation. Past earnings do not necessarily have any bearing on future earnings – an overlooked concept that can be quite the game-changer in the hands of an informed investor.

On a final note, I’d like to remind everyone of the unpredictability and risk associated with stocks and other investment opportunities. And while Roku managed to pull off quite a surprising move today, it’s equally possible for the tables to turn tomorrow.

Okay, time to head back to the trading room! Have a great evening and happy trading! We’ll see you tomorrow with more exciting insights from the stock market.

Bye for now!