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Netflix, Inc. Message Board

  • CruisinForGold CruisinForGold Nov 18, 2010 12:51 PM Flag

    You Have to Respect the Channel Break!

    Looks like we are not going to see the 161/162 area I was predicting in the short-term.

    NFLX has been in a well-defined downtrending channel from the 11 Nov top at 178.69. The channel is approx $7 wide and it broke to the upside today at approx $169. That would give a near-term target of 169 + 7 = 176.

    If you are holding Nov 19 170 puts, then buy the stock here using the puts as short-term protection. It's a decent chance that NFLX heads toward 175 (and overshoots) for options expiration tomorrow.

    Worth a shot!

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    • Do you see it continuing the downtrend or bouncing up and out?

    • Does your opinion change if it closes in the channel?

    • The last time NFLX looked like this was the May '10 time period.

      The stock had a hammer signal on 13 May and course corrected to the lower Bollinger Band on 21 May. It was reversed here at raced back and above the hammer signal point. Significant resistance wasn't met on the initial advance until crossing the upper Bollinger Band on 28 May.

      We've now reversed off the 27 Oct high to 16 Nov's low just above the lower Bollinger Band. The upper Bollinger Band is now sitting at 179's. That also is the opening quote for NFLX on the 27 Oct reversal.

      There is also an uptrending trendline off the tops that is now in the 200's. We didn't get to this upper trendline on the 27 Oct reversal day. In addition, the previous move from 147 to 184 was $37. Add this to the recent low of 163 + 37 and you get a new target of 200 - I think we have some unfinished business to take care of!

      Bottomline - I would close out all short positions now and go Long. [Keep some puts in place to protect an unexpected breakdown]. I think we are now aligned to make a run to the top!

103.30+0.49(+0.48%)May 27 4:00 PMEDT