As the trend towards streaming programming continues, I believe Roku has the potential to be a big-winning stock in 2021. After more than doubling last year, Roku has been building a very large base over the course of the first half of 2021. On July 23, I took a position in Roku as it began to emerge with skyscraper volume coming in. As I mentioned in a previous post, I was a little anxious about the market coming into this week, but strong moves in Shopify, Crocs, Nvidia, CRWD, INMD, and SNAP over the last few days gave me the conviction to add Roku to my portfolio.
As more and more people "cut the chord," Roku provides an excellent alternative for people who want to watch content from Peacock, Hulu, Netflix, HBO Max, and more. Fundamentally, Roku has produced three-consecutive quarters of triple-digit earnings and is estimated to have a monster 2022 with annual earnings projected to more than double.
From a technical perspective, Roku has a classic looking chart. I love the prolonged uptrend in 2020, which indicates strong institutional support. As Roku corrected to its' 40-week moving average this year, it consistently closed above this key support level which is something I always like to see. In addition, I really like the powerful rally in June followed by the low-volume pullback towards the 50-day line in early July. Friday's breakout on massive volume was the icing on the cake for this "delicious" looking chart.
Earnings are set to be released in early August. Let's hope the strong trend in Roku continues in the coming months.
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Full Disclosure: I currently own ROKU.
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