With ROKU’s results imminent, as I mentioned yesterday, this already regularly active and volatile stock is well worth watching. Here’s what it offered up on Wednesday:
The entry here was a bit funky, with an almost-entry a few minutes before the actual entry. Some people like to call these ‘fakeouts’, though I don’t really like the term myself. It suggests the stock is somehow sentient and is playing with us. The reality is that usually when those non-entries-that-look-like-entries happen, they are non-entries because there’s no momentum behind them. The way I trade (and teach), a chart pattern only signals a potential trade. Momentum (and other off-chart indicators) must be there to confirm it.
Which is why the entry was on the bar shown, not the previous bar. That’s when momo took off. It kept going almost all the way to 144, failed to hit it, and dropped back towards the blue line. I held on to see where the next bar would take us, but by then it had lost its direction and momentum so it was best to get out. It could have been a bigger winner, but taking $1,270 in ten minutes is not to be sniffed at.