A 50% Collapse After the Power Gauge Signaled Caution

A 50% Collapse After the Power Gauge Signaled Caution

By Ethan Goldman, junior analyst, Chaikin AnalyticsAs Marc Chaikin has often said, the only thing more important than the stocks you own is the stocks you don’t own…

Everyone wants to find stocks poised to soar. But for long-term investing success, it’s also critical to avoid the traps. 

And once again, I have the Power Gauge to thank for spotting another breakdown in a popular stock…

Back in October, I noticed that the Power Gauge changed its tune on video-game platform Roblox (RBLX).

As I said at the time, Roblox had soared by an incredible 206% over the past 12 months.

Naturally, the Power Gauge rated the stock as “bullish” during the bulk of that growth.

However, I also shared Roblox’s history of rapid growth and losses…

The stock grew 94% in the eight months after the company went public. Then, it collapsed by 83% over the following six months.

Folks, this isn’t ancient history for Roblox. The stock went public a little less than five years ago…

As you’ll recall from my October essay, I said the “smart money” on Wall Street supported Roblox through its second wave of growth. And the Power Gauge saw that support reverse in late 2025.

Given Roblox’s volatile history and warnings from the Power Gauge, it wasn’t hard to predict what the stock was about to do…Recommended Links:

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The Smart Money Flees Roblox as Its Share Price Sinks

Since that October 13 PowerFeed issue, Roblox is down about 50%. And the big-name investors on Wall Street kept moving their money out of the stock.

Take a look at the chart below…You’ll see that Roblox’s stock plummeted in late October. By the end of the month, its relative strength versus the S&P 500 Index turned negative.

As Roblox continued to fall, the Power Gauge flashed sell alerts for the stock. The first one came on December 10, 2025. That’s right around when Roblox fell into “bearish” territory in our system.

As you can see, the stock kept falling after the rating change. Today, Roblox still earns a negative overall grade in the Power Gauge.

Remember, Roblox lost 83% of its value the first time it plunged. Considering the “bearish” rating right now, I won’t be surprised to see the stock continue to fall.

Of course, I also said the stock has a history of rapid gains as well. But the video-game industry recently caught a new headwind that could postpone another spike in value for Roblox…

A Tech Titan Sows Chaos in Video-Game Industry

Last Thursday, Alphabet’s (GOOGL) Google rolled out access to a new AI model. It calls this new model Genie 3.

Here’s the exact description from the Genie 3 website…

Genie 3 is a general-purpose world model. It uses simple text descriptions to generate photorealistic environments that can be explored in real-time.
Put simply, Genie 3 is a major step in AI use in video-game development. Google even touts it as a “key stepping stone on the path to AGI [artificial general intelligence].”

AGI is a way to describe an AI model that can match humans at anything.

Of course, that means video-game development as well.

Genie 3 does have some limitations. But its release further spooked Roblox’s investors…

The stock dropped 13% in a single day after the Genie 3 announcement. Other video-game stocks also took a major hit…

Take-Two Interactive Software (TTWO) dropped about 8%. And Unity Software (U) – which creates software for game developers – collapsed by roughly 24%.

We saw how fast AI advanced in 2025. And it’s impossible to fully predict what the future of the technology holds.

But when it comes to Roblox’s stock, we don’t need to take wild guesses…

The Power Gauge previously flashed clear warning signs. And it’s still saying to avoid the stock right now.

Good investing,

Ethan Goldman

Editor’s note: If you don’t already have access to the Power Gauge, you can get it as part of a special offer for Marc’s Power Gauge Report newsletter…

This offer includes a full year of access to our one-of-a-kind system – and its ratings and data on more than 5,000 stocks. Plus, you’ll be fully protected by our 30-day, 100% money-back guarantee.

If you aren’t already a Power Gauge Reportsubscriber, get the full details on this special offer by clicking here.

Market View

Major Indexes and Notable Sectors  # HLD:    BULLISH    NEUTRAL    BEARISHDow 30

+0.5%918 3S&P 500

-0.48%114294 92Nasdaq

-1.75%2254 29Small Caps

-0.86%648928 311Bonds

-0.25%Materials

+2.35%520 1

— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are  Bullish. Major indexes are mixed.*  *  *  *

Sector Tracker

Sector movement over the last 5 daysConsumer Staples+5.67%Energy+5.55%Materials+3.88%Industrials+3.2%Financial+1.83%Real Estate+1.49%Health Care+1.11%Communication+0.04%Utilities-0.58%Consumer Discretionary-1.37%Information Technology-7.44%*  *  *  *

Industry Focus

NYSE Technology Services10227

Over the past 6 months, the NYSE Technology subsector (XNTK) has outperformed the S&P 500by +3.78%. Its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #14 of 21subsectors and has moved down 1 slot over the past week.Top StocksratingGOOGLAlphabet Inc.ratingAMATApplied Materials, IratingASMLASML Holding N.V.*  *  *  *

Top Movers

GainersratingSMCI+13.78%ratingFTV+10.63%ratingLLY+10.33%ratingODFL+9.89%ratingCDW+9.45%LosersratingBSX-17.59%ratingAMD-17.31%ratingAPP-16.12%ratingSNDK-15.95%ratingPLTR-11.62%*  *  *  *

Earnings Report

Earnings SurprisesratingFOXA 
Fox Corporation Q2 $0.82 Beat by $0.30ratingMKL 
Markel Group Inc. Q4 $37.41 Beat by $11.68ratingALL 
The Allstate Corporation Q4 $14.31 Beat by $4.45ratingPTC 
PTC Inc. Q1 $1.92 Beat by $0.36ratingESS 
Essex Property Trust, Inc. Q4 $1.25 Missed by $-0.22*  *  *  *

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Published by RJ Hamster

I was born on 6 August 1956 in San Francisco, California to Janet and (the late) Richard Hovis. I grew up in Santa Monica, California where I attended elementary, junior high school, and high school (graduating in 1974), in addition to involvement in sports and recreation (Little League +, the Boy’s Club ++). Further, it was in elementary school – St. Augustine’s By-the -Sea Parish School that I found, and made the choice to truly journey with God. I attended Arizona State University from 1974 to 1977 – seeking to become an architect, however, I was not accepted, and, as such, I graduated with a Liberal Arts degree. Upon graduation from Arizona State University, I attended Cal Poly San Luis Obispo and studied City and Regional Planning at the Master’s level. I successfully completed one (1) year in a two (2) year program – I did not complete the Master’s degree in City and Regional Planning – due to personal reasons. I returned to Santa Monica where I started (October 1979) my career as graphic designer with Exxon Company, USA. I spent five years with Exxon Company, USA. While working with Exxon Company, USA I was accepted into architectural school – Sci-Arc in Southern California, however, I did not attend preferring to stay with Exxon.. In 1982 I married Laura Flosi and in April 1983 we had our one and only child – Lauren Alain Hovis – a gift from God. We moved to Phoenix, Arizona in 1984 from Los Angeles, where I went to work as a graphic designer with Kitchell CEM (from 1985 -1987). From 1987 – 1995 I was an independent contractor, and a registered representative in mortgage finance, financial management, graphic design, and drafting. Further, I attended the University of Phoenix and successfully obtained a Master’s in Business Administration (MBA) in 1982. I was also a member of the Scottsdale Jaycees, where I became very involved in community events and projects. In 1994, I accepted a cartography position with the Defense Mapping Agency in Reston, Virginia. As such, I relocated from Phoenix to Reston. In 1998, I was accepted and worked as a Visual Information Officer with the Central Intelligence Agency. In 2002, I worked as a Support Officer until my retirement (due to a need for shoulder surgery) in September 2018. Away from my Federal Government service, I have been involved in various organizations and activities in Northern Virginia. In November of 2011, I married Rebecca Ouellette in Santa Monica, California. I reside in San Tan Valley, AZ with my two hamster - Jess and Timothy, our fish, our lizard - RJ Lizard., and our cats - Pearl and Grey. As to hobbies, I enjoy playing sports, attending sporting events, mentoring individuals from financial management to hamsters, building models, photography, travel, multimedia design, managing partner for RJ Hamster, and jazz – smooth jazz to a samba or a bossa nova. Love and God Bless, Peter – aka RJ Hamster Jo hi

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