Public trading strategy
Fox buys Roku for $22 billion — ride the streaming mega-merger momentum
Thesis
When a buyout is announced, the target company's stock usually jumps immediately to just below the buyout price because the deal is all but guaranteed. But the combined company will be an absolute advertising and streaming powerhouse, which might make other big media companies feel pressure to make their own acquisitions. Even if the buyout goes smoothly, Roku's stock tends to have strong upward momentum in the days following the initial pop as smaller investors catch up to the news.
Strategy approach
Build a rule-based strategy that enters long ROKU on the 4-hour timeframe when the price pulls back to and bounces off the 20-period exponential moving average (EMA), with an 8-day max hold and a 4% trailing stop.