Is this move sustainable?

As we all know, trading is more of an art than a science. So there is no perfect formula to pinpoint the exact timing even if a direction call is right. But this time, it seems a perfect timing call I made for the stock! I’m talking about the streaming darling, Roku (ROKU). If you missed my call, here it is. When I made the call, Roku was just about going into a severe correction mode as I was cautioning and certainly some doubt was raised whether it was a right call to put some money into Roku. But purely lucky for a perfect timing, Roku quickly did a moonshot after my call with better than expected earnings and now it has doubled since then.

Sure I’m happy for a right call but as a contrarian trader, I’m constantly asking whether a move like this is sustainable. Some time it is but oftentimes it is not. And for Roku, I don’t think it is sustainable. Fundamentally I still like Roku but technically this move is a bit nosebleed overbought. Probably many short sellers got painfully squeezed by the “surprisingly good earnings” and had to covered their shorts, which could push the stock up substantially. And certainly there will be a lot herds typically doing FOMO when something is hot, which will further propel the stock up. What don’t make me feel right is its TA that looks quite bearish in the near term. Actually Roku has presented two times with virtually identical setup in the past year, both of which led to a sizable “crash” in the weeks ahead (see the chart below). While there is no guarantee of course this time it will follow the same path, I think the chance is high we will see a large giveback of the recent gain in the weeks ahead. That even the euphoric moonshot of the general stock market following the Fed's hint of the next QE in the past two days could only move ROKU down not up is quite telling how overbought it has been! Technically it is rather bearish!  Let’s see if I’m right again this time!😄😎