Home » Is This Metaverse Leader Setting Up for a Big Stealth Breakout?

Is This Metaverse Leader Setting Up for a Big Stealth Breakout?

Regular readers know that the metaverse is basically a virtual reality (VR) world where everything happens totally online.

Just strap on a VR headset, log in and you can begin interacting with the metaverse from the comfort of your own couch.

Now, not everyone is a fan of this idea, but I’m extremely bullish on the metaverse.

I expect it to be one of the hottest investment trends of the decade.

We already know that some big companies are getting in on this megatrend, but there’s another stock in this emerging sector of the market that’s starting to turn itself around…

Roblox Stumbles Out of the Gate

Roblox Corporation (RBLX) is the San Mateo, California-based company that operates an online platform that allows you to program and play games and explore virtual worlds.

Fundamentally, the company is positioning itself nicely to capitalize on the metaverse megatrend.

Technically speaking, however, the stock has been a big loser since it came to market in early 2021.

Daily Chart of Roblox Corporation (RBLX) – Source: TradingView

As you can see in the daily chart above, the stock meandered sideways for the first eight months of its existence.

Then, when the company reported strong third-quarter results in November 2021, the stock jumped 42% in a single day.

In the following nine trading days, the stock jumped another 30% and set an all-time high of $141.60.

Unfortunately, this move came right as the broader market started to break down, taking RBLX with it.

From November 2021 through May of this year, the stock lost a whopping 84.7% of its value.

For a while, it seemed as though this was just another meme stock that the day traders on Reddit forgot about.

But now, things are starting to turn around in a big way…

Turnaround Time?

To see what I mean, let’s zoom in on the daily chart to look at the recent price action.

Daily Chart of Roblox Corporation (RBLX) – Source: TradingView

In the chart above, I’m seeing lots of the typical signs of stealth buyers entering the market.

First, check out the large, green volume bars at the bottom of the chart. 

The first big volume spike came the day after the stock plunged to its all-time low, which was then followed by another big volume spike and a 19% bounce. 

In late June, the big buyers started to show up again, and we saw another volume spike as the stock crossed above its 50-day moving average (red line).

That, in and of itself, was another great sign that the bulls were looking to take back control from the bears.

The stock saw two more big volume spikes in early July, which pushed the stock up into its current consolidation range.

Stealth Signs

Now, you can see that RBLX is trading in a sideways channel, and the pullbacks have become shallower from left to right on the chart as daily volume has decreased. 

This is generally a sign of institutional accumulation as they absorb sellers and the stock becomes harder to buy. 

In other words, less supply is coming to market. And when you have an increase in demand and a decrease in supply, prices can rise quickly.

Remember… An asset must be in demand and aggressively bought by large institutional investors. That’s the only thing that makes stock prices increase.

And that’s exactly what we’re starting to see in Roblox stock.

So, if you cut this stock from your watchlist as it plunged last year, it may be time to take another look…

Follow the Big Money

Institutional investors like pension funds, mutual funds, hedge funds and other large players make massive institutional buys that fly under the radar of most individual investors.

But if you know how to spot those buys in real time, like we’ve just done with RBLX, you can potentially follow the big money to big gains.

This is what I focus on inside my premium Stealth Trades research service.

Look, if you haven’t been making money in these markets, it’s time to try something new…

Take a few moments to click here and watch my brand new Stealth Trades video bulletin…

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

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Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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