Roku Inc (NASDAQ:ROKU) pulled back briefly last week following a bearish brokerage note, but bounced from a key technical level. The shares are now approaching the century mark and a recent batch of options bulls are anticipating even more upside for the streaming stock.
Taking a quick step back, Roku landed on a list of stocks that have seen the most weekly options activity in the past 10 days, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, with names highlighted in yellow new to the list. The bulk of the activity for ROKU over this two-week time frame has occurred on the call side, in particular at that $100 price point.
Specifically, the weekly 7/12 100-strike call has seen one of the largest increases in open interest on ROKU over the past 10 sessions. This strike is being sought after in early trading today, too, with almost 3,000 contracts traded here so far. Data suggests buy-to-open activity across the board, meaning bulls are targeting a big breakout above $100 by expiration at the close this Friday, July 12.
This optimism toward Roku stock seems to be confined to the options arena. In fact, nearly 9% of the equity's float is dedicated to short interest. Plus, more than half of the 15 analysts covering the security call it a "hold" or "strong sell." This leaves the door open for a round of short covering and/or upgrades, which could help propel ROKU past the round-number century mark.
Also working in the stock's favor is a recent test of support at its 40-day moving average. According to White, there have been five other times ROKU stock has come within one standard deviation of this trendline after a lengthy stretch above it. One month later, the shares were up 6.76%, on average. At last check, ROKU stock was up 1.8% at $99.88, earlier topping out at $100.24.