Originally Written:Mon, Aug 4, 2014 at 1:34 PM.
Note that this is not a recommendation to buy or sell anything. Risk your money at your own peril.
Summary: NFLX is in a secondary downtrend, that’s likely to continue.
On this chart, you can see that Netflix has started a typical secondary reaction downtrend, within the context of a long-term bull market. Some interesting things pointing to a continuation of this downtrend are as follows.
- The trend is always more likely to continue than reverse
- No large support area for a while
- Both MACD lines have crossed the signal line. (bearish signal)
- The Bollinger Bands are pretty tight. (this can signal an upcoming large move in either direction)
- Price has crossed through the 50-day moving average.
Now, from a tactical point of view, it’s also an interesting place, as the risk/reward ratio is pretty good if you consider that price has a reasonable chance of falling to 380, and a short stop could be placed at 435ish pretty safely. Meh. Might be interesting.