ROKU Trade on Feb 18, 2022 09:52 from JRockTrades: Tradervue User Stock Trades.

Big Picture

ROKU has been in a longterm downtrend, so much so that it is now trading at about a fifth of the all time high.

ROKU had earnings the previous day. The earnings report itself was a wild event as the investor relations page crashed and it took some time to get the results.

EPS $.17 vs $.04 expected
Revenue $865M vs $894M expected
Lowered guidance

For sure these results were not what the street wanted to hear and ROKU made another leg down, continuing it's trend.

Technical Setup

RVOL: 15
ATR: 11.87
VIX 28

Over the course of the afterhours and pre-market the stock traded from 150 down to 104. For sure there would be investors deep underwater who needed to get out of the stock, which would lead to any early attempt at bouncing being sold off (my thinking).

ROKU made an opening drive high of 115.50 before pulling back a little. I wanted to short from somewhere near the highs. Since it was early, I took half a position short from 115. I then added a second half when price moved to 116, but couldn't break over. I had an average of 115.29, risking $1 on the position.

Trade Management

I covered half the position near $114 to cover the risk, which would more than do it. I continued to cover at lower targets, but I definitely took too much off too quickly, so that when the trade was really working, I had little position left.

Conclusions

Pretty happy with the result and there are clear ways to improve next time when a very similar setup presents.