• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Roblox Bounces Back: Is It Worth Buying?
Stock

Roblox Bounces Back: Is It Worth Buying?

by February 17, 2023
by February 17, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Roblox (RBLX) may still be considered by some on Wall Street as a relative “noob,” but the company’s plans and ambitions are catching the attention of investors as its most recent Q4 22 earnings and guidance laid out a much clearer picture of its perceived arena.

Bricks Beyond the Game Space

In the past quarter of 2022, Roblox missed analyst expectations on earnings per share but beat consensus on revenue. The company reported 58.5 million daily users, a 19% increase of new “Robloxians” year-over-year. 

But the most exciting thing is what it revealed about its playbook moving forward. During its quarterly analyst conference call, CEO Dave Baszucki emphasized the advantage of being able to focus on “one product, one platform.” And with that singular platform, Roblox aims not only to expand its geographical and “age” reach, but beyond the gaming space toward education, concerts, and (general) communication. And with hardly any cash burn in 2022, the company sees acceleration as it heads into the first quarter of 2023. 

The technicals appear to paint a similar picture.

The Technical Picture

In the last week, Roblox’s StockCharts Technical Ranking (SCTR) score made a drastic jump from below 10 (Oof!) to 84.1, although it dropped a bit since then.

Chart source: StockCharts.com. For illustrative purposes only.

Let’s take a look at the Roblox stock chart below. What do you see?

CHART 1: ROBLOX STOCK PRICE. A breakaway gap after earnings, a reverse head and shoulders pattern, and a potential Golden Cross are three things Roblox stock has going for it. Chart source: StockChartsACP. For illustrative purposes only.

A Breakaway Gap. RBLX jumped over 31% the day after earnings forming a breakaway gap above its 41.58 hurdle (resistance). If you’re not familiar with this term. Breakaway gaps are pretty exciting events if only because it’s fascinating to see an asset’s price catapult itself beyond a level of congestion or trading range. But the congestion area, itself, is also pretty interesting, and that leads to the next point.

A Reverse Head & Shoulders. Take a look at November 21 – 30, December 23, and January 24. This should correspond respectively, to an LS, H, and an RS—in short, a reverse head and shoulders pattern. The neckline is a little messy but it also corresponds to the gap space, which often gets filled or retested. 

Recovering from a Death Cross? RBLX experienced a Death Cross event on Valentine’s Day 2022 (no love from Wall Street last year). The 50-day moving average (MA) is still below the 200-day MA. But with RBLX’s newfound momentum, you might want to pay attention to see if a Golden Cross might be on the horizon.

Chaikin Money Flow. A great indicator for estimating buying/selling pressure, the Chaikin Money Flow indicator has been in the green (above the zero line) since early December. Though it threatened to get “pwned” (in Roblocian speak) toward negative space in the day before earnings, the indicator spiked following RBLX’s jump in price. Note a slight divergence in price and money flow reading. Technically, the divergence gives us a warning signal that price is bound for a potential pullback. It’s possible, especially considering the gap and the H&S neckline, but now you have to weigh this against the company’s guidance, fundamentals, and market sentiment, which currently seems bullish.

Trading Roblox Stock

If you’re looking to open a position in RBLX, note the technical conditions mentioned above. Plus the range between 29.45 and 30.65 seems to be appropriate stop-loss levels if you’re going long (those are the “shoulder” lows). If you’re basing your trading decision on the fundamental picture, be sure to bear in mind the latest producer price index (PPI) and consumer price index (CPI) reports. Both came in hotter than expected. And the PPI threatens a delayed response in transferring cost increases from manufacturers to consumers. In short, the Fed is likely to continue raising rates. More importantly, the broader market may react negatively to this news. And when the broader market falls, it tends to take most assets with it.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your personal and financial situation, or without consulting a financial professional.

You Might Also Like
  • U.S. Oil Reserves Drop to 40-Year Lows
  • How to Use the ADX Indicator (Trend Strength Explained)
  • The Ord Oracle June 19, 2023
  • Bullish Tidings: Breadth Rallies, Oil Service Makes its Move, Bonds Survive Yield Scare
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Doctors react after Fetterman checks into hospital for clinical depression
next post
Index Options vs. Stock Options: What’s The Difference?

You may also like

September: Exit Light, Enter Night

September 8, 2024

Another New High for the Year?

July 19, 2023

Bear Flag Alert- Downside S&P 500 Target Update

March 28, 2025

Bullish Moxie Setups Working

April 15, 2023

Boeing Stock Takes Off: How to Profit From the Price...

November 13, 2023

The 2 Best Holiday Gifts You Can Give Your Kids!

December 16, 2023

Combining Price Structure, MACD & ADX

January 26, 2023

The SPY Knocks on the Door of Resistance

January 29, 2023

Cocoa Soars: Nobody Knows the Truffles I’ve Seen

July 12, 2023

The Ord Oracle January 24, 2023

January 25, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    The Titanic Syndrome Indicator Issues a...

    February 21, 2024

    Gold and Silver Set to Smash...

    May 17, 2024

    McClellan Oscillator Leaves a Simple Structure...

    October 14, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here