Last updated June 26, 2019
In early May I wrote “The ultimate target for wave-A appears to be around the mid- to high $90s.” Well, we got $110 last week. So not too bad a forecast given back then price was trading in the $60s… This means that most likely wave-A of Cycle-C has completed, especially given that a diagonal pattern completed since then. It can always be a leading diagonal (meaning more highs to follow), but for now the whole advance off the December low looks much better as three waves then possible five, also considering ROKU has mostly moved in three waves both up and down (except for the Primary-C rally April->October last year). Cont’d below.
There’s negative divergence on the weekly RSI5 and FSTO, but not yet on the MACD. And the Money Flow is also still very high, which can aid in higher prices as well. So for now there’s no real certain indication yet wave-B is underway.
Moving to the daily chart (see below) we can see price has moved below the 20d SMA, which is a good first sign for lower prices ahead. But, a move below the 50d SMA would add more credence to that thesis. Given that the 20d>50d>200d SMA and all three are rising, this is still a Bullish chart. A setup like in October 2018, with price moving below the 50d, then retesting it and failing is a much better pattern to signal further weakness is ahead. So for now; caution is advised to longs as price has the potential to move as low as $55 (lower end of blue support zone in weekly chart above). This would fit with a 62% retrace of wave-A, and an additional 40% haircut. Bears may want to be a bit more patient as well and wait for further confirmation; e.g. a break below $90 (and then a bounce). Given that the daily RIS5 is now oversold, it is simple not a good spot to go short just yet. It is better to wait for that aformentioned bounce .