The Inside Bar Day Play On Roblox's Stock
Roblox Corporation (NYSE:RBLX) has been in price discovery mode since debuting March 10.
Without much price history, it can be more difficult for traders and investors to know when to buy and sell a stock because support and resistance levels require multiple rejections to be seen clearly. With 26 trading days now under Roblox’s belt, the stock is starting to set up levels and patterns on the daily chart.
The past three trading sessions look bullish for Roblox.
The Roblox Chart: On Thursday, Roblox’s stock was setting up a third inside bar pattern above resistance at $74.93. Inside bars are a consolidation pattern that often happens after a stock makes a big move. Inside bars are bullish because it means the market has had time to regroup and if new buyers have come into the stock it can make another big push North.
On Tuesday, shares of Roblox closed up almost 10% on the day, so it's no surprise the stock needed a few days to digest the bullish price action. At 1:45 p.m. ET, Roblox’s stock made a temporary bullish break but was shot back down below the top of Wednesday’s candle which means it may need a little more time to gather steam before making the break.
Roblox’s stock is trading above both the eight-day exponential moving average (EMA) and the 21-day EMA, which is bullish and isn’t too far extended from either which indicates it could make a bullish move more easily.
Bulls want to see a break of the inside bar pattern Thursday or for Roblox’s stock to create a fourth inside bar on Friday. Both scenarios are bullish. If the stock can make a bullish break, it can move up to test its all-time high of $83.41. If It can break above all-time high resistance, the stock has blue-skies above and will require a further period of price discovery.
Bears want to see the inside bar pattern break bearish and for the stock to fall below the eight-day and 21-day EMA. This scenario is less likely. If Roblox’s stock dropped down and lost support at $74.93, however, it could fall lower to its next support at $72.49.
RBLX Price Action: Shares of Roblox closed up 6% at $79.66.
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