Streaming name Roku Inc (NASDAQ:ROKU) had a rough go of it in the earnings confessional earlier this month, shedding 6.3% the day after the report. However, that pullback could have bullish implications if history is any guide, as data from Schaeffer's Senior Quantitative Analyst Rocky White suggests the stock may be flashing a buy signal as it nears a historically bullish trendline.
Specifically, ROKU has come within one standard deviation of its 200-day moving average following an extended period above the trendline, defined for this study as having traded north of the moving average 60% of the time in the past two months and in eight of the last 10 trading days. The equity has seen three similar pullbacks within the past three years, which has resulted in an average 21-day gain of 12.1%.
From its current perch at $130.04, a move higher of similar magnitude would put ROKU at its highest point of 2020. The shares are also facing off with their year-to-date breakeven level, despite a 145.6% year-over-year gain.
Meanwhile with earnings come and gone, a volatility crush means the stock's near-term options are attractively priced at the moment. Schaeffer's Volatility Index (SVI) stands at 59%, in the 12th percentile of its annual range. This indicates that now is an attractive time to jump aboard the streaming name with options.
Even further, Roku stock has been more volatile than expected during the past 12 months. This is based on its Schaeffer's Volatility Scorecard (SVS) of 96 (out of 100.)