Analysis: Roku shares plunge 15 percent after hours - what's behind it and what happens next?

Analysis: Roku shares plunge 15 percent after hours - what's behind it and what happens next?

According to a report by stock3.com, Roku shares plunged about 15 percent in after-hours trading, despite quarterly numbers that were better than expected. With earnings of -$0.55 per share, Roku beat analyst estimates of -$0.57. Sales of $984.4 million exceeded expectations of $965.85 million. Nevertheless, market participants reacted with a sell-off, causing the price to struggle for the important support zone of $80.

The zone around USD 80 represents significant support as this is where the EMA200 runs on the daily chart. An ideal scenario would be that the price initially hovers around USD 80 and later closes above the USD 82 mark. This would form a reversal candle at the 200-day line, potentially pushing the stock back up to the $90 level. However, a lack of a special candle could lead to a sideways trend in the next few days. A daily close below $77 could even lead to a retrace to the next support zone at $72.

The impact of this sell-off could cause short-term instability in the market, particularly in tech stocks. Investors could be unsettled and draw conclusions from Roku's share price weakness that other companies in the industry are affected. It is therefore important to keep an eye on further developments in order to be able to make possible adjustments to the portfolio. This sell-off shows the market's volatility related to investor expectations and reaction to company results. It also illustrates the importance of support zones and technical chart signals for the price development of stocks.