Roblox Corporation (NYSE:RBLX) shot up over 6% on Monday, after breaking up bullishly from a falling channel pattern on April 28, which Benzinga called out earlier that day.
On Tuesday, Spotify Technology (NYSE:SPOT) announced its debut on Roblox, the first music streaming service to take up real estate on the popular gaming platform. On Spotify’s “Spotify Island,” Roblox’s users will be able to interact with musical artists, complete game-based quests, purchase merchandise, gain access to exclusive content and create their own music through Soundtrap, a digital audio creation app.
Roblox, the first true example of the metaverse, has been a hot landing spot for music artists, hosting dozens of virtual concerts by big names such as Lil Nas X and Paris Hilton.
The uber-popular gaming platform has been heavily beaten down despite its popularity, plunging almost 80% from the Nov. 22, 2021 all-time high of $141.60 to reach an all-time low of $29.52 on April 28.
On Tuesday, Roblox was showing signs the stock is in the midst of a larger reversal to the upside, however.
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The Roblox Chart: On April 28, Roblox closed the trading day slightly above a descending channel that had been holding the stock down since April 12. On Friday, Roblox fell down to test the upper descending trendline as support and because the stock held above it, a big bullish reaction on Monday caused Roblox to spike higher.
- The break up from the falling channel combined with the retracement has set Roblox into a confirmed uptrend. Bullish traders looking to enter into a position can watch for a reversal candlestick, such as a doji or hammer candlestick, to form when Roblox creates its next higher low above the $30 mark.
- On Tuesday, Roblox was seeing some bullish momentum, rising over 2% higher but being held down by the eight-day exponential moving average on the daily chart. Bullish traders will want to see Roblox regain the level as support for more confidence going forward.
- The move up over the past few days has allowed Roblox’s relative strength index (RSI) to rise up to a more comfortable level. The stock’s RSI is measuring in at about 37% and while still on the low end, the indicator has been making a series of higher lows, which indicates there is momentum to the upside.
- Roblox has a gap above on its chart between $59 and $66.34. Gaps on charts fill about 90% of the time, which makes it likely Roblox will trade up to fill the empty range in the future.
- Roblox has resistance above at $36.04 and $43.10 and support below at $29.52.
