ROKU: Looking for a decent move up (Elliott wave)Looks like Roku has finished a cycle wave 1 with a massive leading diagonal structure. The downturn might not be over just yet, but it is looking like the next move up is starting. Looking at the structure, the wave 2 should have had a deeper retracement than just about 50%. Usually a leading diagonal is followed by retracement over 78%. This may mean the current decline is only the first phase. We will get a decent B wave bounce followed by wave C decline. It is also possible that ROKU is in it's larger degree cycle 3 uptrend that started last week. In that case wave 2 was shallow and wave 3 can be very bullish. We should have an idea in the new few weeks.
Either we have wave 2 complete or not, the next move should be up. Even if we get one more lower low, on a larger degree we should be looking at a decent upward move for the next few months. There is no good way to tell what the next upside target will be at this moment. Things will start to get clearer as the next few waves structures start to build up. For now the upside target could go anywhere from .618 to 1.236 extensions from the last high to recent low (somewhere between 263- 704). At that point, if we have a choppy 3 waves structure rather than a clean 5 waves, it would be biased more towards wave B than wave 3.
All that is still far out right now. For now, I am building long positions with bullish butterfly options. The short side is only to protect against the downside risk. I did buy a couple of leap long calls but a very small position. My bias will be in line with what NDX will be doing in the new few weeks and months.
