Roblox's stock could be on the verge of a 'breakdown'

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Roblox's stock could be on the verge of a 'breakdown'

As the kid game app Roblox finds its footing in the public market, it could be open for trade, tradingAnalysis.com's Todd Gordon says. The shares of the company have been growing since Hasbro announced a partnership with Roblox on Tuesday to create new merchandise around the Monopoly and Nerf franchises. Roblox went public on March 10 via direct listing and boasts a nearly$ 44 billion market cap. On its chart the pattern I like here is we have a series of inside bars, meaning that the current day's price range stayed within that of the prior day, Gordon told CNBC's Trading Nation on Thursday. All that means is a little bit of consolidation before what is likely to be a move above previous highs, Gordon said.

We 'll let the market carry us in a long position here. One way to do so could be leveraging a buy stop order roughly 10 cents above the stock's prior high to reduce the move and cutting losses if the stock falls below$ 73, Gordon said. Another way to trade monthly options that expire in June- buy the$ 80 call and selling the$ 90 call in a bet on clear but contained upside after the earnings report of May 19, he said. This is more of a breakout play on a newly issued name, he said. I 'm planning to add this on a breakout to my portfolio.

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