Roblox Soars 7% as Legal Cloud Lifts—Is This the Catalyst for a New Bull Run?

Summary
• Roblox faces Louisiana lawsuit over child safety allegations
• Wedbush analyst Alicia Reese upgrades RBLX to 'most compelling' growth stock
• Intraday surge hits 127.55, up 7.02% from 117.52
• Options chain sees explosive volume in 125–130 strike calls

Roblox Corporation (RBLX) has ignited a frenzy in the market, surging 7.02% to $125.77 in a single trading session. The stock’s dramatic move follows a Wedbush analyst upgrade and a legal reckoning that appears to be subsiding. With the stock trading near its 52-week high of $150.59, investors are scrambling to decipher whether this is a short-term bounce or the start of a sustained rally.

Legal Scrutiny Eases as Wedbush Hails RBLX as Sector Gem
The 7.02% intraday surge in Roblox shares is directly tied to two pivotal developments. First, the Louisiana Attorney General’s lawsuit, which accused the company of facilitating child sexual abuse material, has shifted from a headline risk to a manageable legal challenge. Second, Wedbush analyst Alicia Reese’s bullish appraisal—calling RBLX the 'most compelling' growth stock in the video game sector—has reignited investor confidence. Reese highlighted Roblox’s rapid response to safety concerns and the success of games like 'Grow a Garden,' which drove engagement metrics to record levels. While the lawsuit remains unresolved, the market is pricing in a near-term resolution and a focus on the company’s long-term growth potential.

RBLU ETF and Call Options Lead the Charge as Volatility Rises
• MACD: 0.617 (bullish divergence from signal line 2.88)
• RSI: 34.41 (oversold territory)
• Bollinger Bands: 124.80 (middle band) vs. 125.77 (current price)
• 200D MA: 76.83 (far below current price)

Roblox’s technicals suggest a short-term rebound is in play. The RSI at 34.41 indicates oversold conditions, while the price hovering near the upper Bollinger Band (137.51) suggests a potential breakout. The T-REX 2X Long RBLX Daily Target ETF (RBLU), up 14.63%, is a leveraged vehicle to capitalize on this momentum. For options, two contracts stand out: RBLX20250829C125 and RBLX20250829C127.

RBLX20250829C125
• Code: RBLX20250829C125
• Type: Call
• Strike: 125
• Expiry: 2025-08-29
• IV: 51.17% (moderate)
• Leverage: 39.17%
• Delta: 0.5338 (moderate sensitivity)
• Theta: -0.8412 (high time decay)
• Gamma: 0.05295 (high sensitivity to price changes)
• Turnover: 674,591
• Payoff at 5% upside (132.06): $7.06 per contract
• This call offers a balance of leverage and liquidity, ideal for a 5% price target.

RBLX20250829C127
• Code: RBLX20250829C127
• Type: Call
• Strike: 127
• Expiry: 2025-08-29
• IV: 53.15% (moderate)
• Leverage: 52.22%
• Delta: 0.4320 (moderate sensitivity)
• Theta: -0.7475 (high time decay)
• Gamma: 0.05042 (high sensitivity to price changes)
• Turnover: 877,966
• Payoff at 5% upside (132.06): $5.06 per contract
• This contract’s high leverage and gamma make it a top pick for aggressive bulls.

Aggressive bulls may consider RBLX20250829C127 into a bounce above $127.55.

Backtest Roblox Stock Performance
The backtest of Roblox's (RBLX) performance after a 7% intraday increase shows favorable short-to-medium-term gains, highlighting the stock's potential for positive movement following strong price days. The 3-Day win rate is 54.40%, the 10-Day win rate is 56.55%, and the 30-Day win rate is 60.32%, indicating a higher probability of positive returns in the immediate aftermath of a significant price surge. The maximum return during the backtest period was 8.76%, which occurred on day 59, suggesting that RBLX can offer substantial gains even months after an initial surge.

Breakout or Blip? Key Levels to Watch as RBLX Reclaims Momentum
Roblox’s 7.02% surge reflects a shift in sentiment from legal concerns to growth optimism. While the stock remains unprofitable, Wedbush’s endorsement and the success of 'Grow a Garden' have reignited its narrative. Investors should monitor the 127.55 intraday high as a critical resistance level. A close above this could trigger a retest of the 52-week high at $150.59. Meanwhile, the sector leader Netflix (NFLX), up 1.86%, offers a benchmark for broader market confidence in interactive media. For RBLX, the path forward hinges on sustaining engagement metrics and resolving litigation risks. Watch for $127.55 breakdown or regulatory reaction.