Jeff Cooper: Breaking Down a ROKU Rip

On Wednesday, at 2:21 p.m. ET we sent Daily Market Report members an alert to buy ROKU:

ROKU hit our $43.70 target pretty soon after:

Now let's look at the price action and setup that gave us this successful trade:

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ROKU pulled back to its 20 day moving average for a possible Holy Grail buy setup following a turndown in its 3 Day Chart on Tuesday.

It dived lower on Wednesday morning, but set an Opening Spike Low.

After a test of the morning low, tracing out a little W Bottom on the 10 minute, ROKU began to creep higher.

It trickles before it rains, and rains before it pours.

So too, in stocks.

Stocks creep before they walk, walk before they run, and run before they gallop into exhaustion.

The tell to trigger us long was the Late Day Breakout above the morning range, which followed a Rule of 4 Breakout -- a breakout over a 3-point trendline.

The combo perpetuated an explosive short-term move.

As my dad used to say to me, "Stocks don't move, they are moved."