Tech stocks keep falling, but there are some places you can invest until the market finally bottoms. In particular, you need to look for stocks that are likely to have found their bottoms already or are approaching solid levels of support.
The technicals show Roku could have fallen far enough to have found a considerable support level that would be hard to break. The level of support I’m referring to dates back to March 2018. After a big price increase, Roku then sat between $38.51 and $58.09. The most obvious support line for Roku to sit is around $43, only $2 lower than its current price of $45.
Remember, this support level dates back to 2018. That’s a long time ago in the world of Roku. Not many people had even heard of Roku at the beginning of 2018. Most only started to hear about it during the stock’s rapid increase during the pandemic. And the pandemic was the beginning of what should be the decade of TV streaming. If Roku were to drop below $38, it may be heading to as low as $24. I don’t see that happening.
One of the reasons I like Roku here is due to the rise in Netflix stock recently. Netflix has risen from $167.30 to $331 over the last seven months. It’s possible Netflix retests its lows again, but the lows seem to be in for Netflix already given how much buying we have seen in the last six months. How long will it be before some of that buying shifts to Roku? My guess is not long.
Netflix has a market cap of 125.30 billion. Roku’s market cap is 6.38 billion.
Image credit: FinViz