How to Trade FuboTV After Surge in Volatility
FuboTV (FUBO) - Get Report has been all over the map lately, most recently spiking about 20% in Tuesday’s trading session.
The move came after a painful drop in the stock and I’m not just referring to the 13.4% decline on Monday.
Shares have been rallying after Needham analysts reiterated their buy rating and $60 price target and after the company announced better-than-expected preliminary results.
Fubo hit a high of $62.29 on Dec. 22 after rallying 125% in five days. The move was stunning and shares closed near the highs that day.
However, the stock slipped 15% in the following session, with short reports driving a bearish sentiment into the thesis.
As a result, Fubo stock fell for seven straight sessions, shedding more than 60% of its value in the process. And now as the stock bounces: Is this one a buy?
Trading Fubo
Daily chart of Fubo stock.
Chart courtesy of TrendSpider.com
As you can see on the daily chart above, Fubo has been creamed from the highs. It paused at the 10-week moving average on Friday, broke below it on Monday and then closed below the 50-day moving average.
After such a big decline, it looked primed for a bounce. However, not many were looking for a 20% one-day rally.
With Tuesday’s surge, Fubo stock is reclaiming the key moving averages it recently broke. However, It’s struggling with the $30 mark.
A push above $30 likely puts a gap-fill in play up toward $32.25. Above that and a cluster of moving averages is in play near $34 to $35. That’s where Fubo finds its 10-day and 21-day moving averages, as well as a volume weighted average price (VWAP) measure.
Should shares squeeze above this mark, then $40 could be on the table, which most recently served as resistance.
On the downside, a break of this week’s low at $23.17 would be discouraging.
It would likely put $20 in play, followed by the 100-day moving average. Keep in mind, Fubo is a wild mover. It can fall or rise by double-digit percentages and that is considered normal with this name.
In other words, size appropriately when trading this name or avoid it altogether.
