Shares of Roku, Inc. (NASDAQ:ROKU) are trading lower after a disappointing earnings release. If they fall to $390, there’s a good chance the sell-off ends as this level was support in July.
There’s support here because it had previously been resistance. Resistance levels turn into support levels because of sellers’ remorse.
Investors who sold at $390 in April thought they made a good decision after the shares trended lower. But now that they’re higher, some of them have decided to buy their shares back.
As a result, these investors place their buy orders at $390. If there are enough of them it will cause support to form. This is why this important level was support in June, and it may be so once again.
See Also: Roku Shares Fall Despite Record Q2: Key Takeaways For Investors
