Roblox Corp (NYSE:RBLX) stock is headed for a third-straight gain, up 1.6% to trade at $55.19, at last glance. Though the video game name fell to a two-year low of $40.15 on May 13, with the round-number $40 level stepping up as support. Despite a 32% year-to-date deficit, a bull signal is now flashing on the charts.
RBLX just crossed above its 80-day moving average for the first time in at least 21 trading days. Per Schaeffer's Senior Quantitative Analyst Rocky White, this event has happened six times in the last 10 years, after which RBLX was higher one month later 83% of the time, averaging a large 19.2% gain.
From its current perch, a similar move higher would put the shares at $65.78. This level coincides with significant buildup of call open interest (OI) at the front-month standard July expiration, which could act as a magnet.
Furthermore, short interest has been heavily building, up 20% in the most recent reporting period. The 30.27 million shares sold short and represents 4.8% of the stock's available float. Should a strong rebound occur, an unwinding of this pessimism could provide added tailwinds.
