The stock has made new all-time highs the last 2 days but has not yet been able to make a new all-time daily or weekly closing high.
The intra-day rallies seen have probably all been a short-squeeze as it is highly unlikely the stock can keep this rally up with the indexes heading lower.
Nonetheless, after 2 days of squeezing all the shorts, there is no level or situation right now that can be squeezed any more and the indexes are breaking down.
Yesterday, the stock made a new intra-day high at 128.42 but closed at 126.42 and today it once again made a new intra-day high at 129.72. It is likely, though, that unless the indexes rally (not likely) that once again they will take the stock down to trade around the 126.81 level, both today and tomorrow as that same price is the weekly closing resistance.
As far as the high today is concerned, the $130 level has to be considered decent psychological resistance and always even levels have a 30 point "wiggle" room at psychological resistance levels. That means that the $130 resistance level could be 129.70 to 130.30. Having seen 129.73 means that level might have now been tested "successfully".
All the indexes are trading below their 200-day MA since yesterday and that is a major negative chart factor. In order for the indexes to negate yesterday's break of that line, the DOW has to get above 10435 and the SPX above 1115 today. That is not looking probable at all. As such, confirmation of yesterday's break should be seen today.
That will not help NFLX to maintain this short squeeze.
As such, I do believe you will see the stock once again close below 126.81 today as well as tomorrow.
I sold the stock today at 129.52 and I am using a mental stop loss at 130.40.
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I covered the short positions at 130.12.
The moment the stock got above the "psychological" resistance between 129.70 and 130.30 it means the stock is likely going higher. This is especially true on a day that the stock is getting NO HELP from the indexes.
Evidently not only a short squeeze is occurring but there must be something in the EPIX deal that is exciting the big traders.
I am not a fundamental analyst so I cannot even begin to comment on the fundamentals of the company. Suffice it to say, though, that the selling coming in is just not sufficient to stop the buying, at least not at this time.
Until the stock shows some weakness, the buying must be respected.
It is also now highly unlikely that the stock will sell off today and/or tomorrow to close below 126.81. As such, this has to be considered a "breakout" and you just don't short breakouts unless they show failure signals.
That won't happen for a few days at least, if it is to happen.
As such, I am not trying the short side anymore for now.
I’ve tried to look at this stock technically too and I think as long as the daily stochastic is moving up and has not crossed, then the bull run will continue to the next logical point at the Fib extension (taken off the 52 wk high) of 136. I’ve also been watching the 15 minute chart, using the 20 sma and 50 sma lines. Until the 50 crosses below the 20 we will continue to move up. Also, there’s been a lot of activity in the Aug 135 calls. I would love to short this stock but there is way too much up momo right now!
Tony, nice to see you again, did not come across your posts since AMZN time back i think in December.
As always, good analysis.
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