Netflix Inc NFLX Daily - Overbought, rolling over. Retest $360?
Notice how NFLX has the last 3 earnings reports that center around the $360 level.
It looks as if NFLX could revisit the sub-360 level again in the next quarter. The strong close on Friday after the dip gives the chart a "stronger look" but the 430-440 level is strong resistance and therefore a low-risk level to establish shorts against. Sometimes trades can be established based on a definition of a low-risk entry level without a meaningful distance to a technical target. The current level of $426 here gives us $66 downside potential and $15 upside risk which seems decent at a 4.2:1 ratio, but when NFLX gets up to $435, then the ratio becomes a strong $75 downside and only $6 risk for a 12:1 ratio.
I don't know if I am right on this and I never know if I am right, but I know what trades I can take and what I can stomach and this setup is something that I am comfortable with. Although I LOVE my Netflix service and all of my kids do too, I'm not a bear on Netflix, but just thinking the chart is overbought here.
Tim 6/16/2014 10:09AM EST 425.72 last (It hit 426 when I was typing)
It looks as if NFLX could revisit the sub-360 level again in the next quarter. The strong close on Friday after the dip gives the chart a "stronger look" but the 430-440 level is strong resistance and therefore a low-risk level to establish shorts against. Sometimes trades can be established based on a definition of a low-risk entry level without a meaningful distance to a technical target. The current level of $426 here gives us $66 downside potential and $15 upside risk which seems decent at a 4.2:1 ratio, but when NFLX gets up to $435, then the ratio becomes a strong $75 downside and only $6 risk for a 12:1 ratio.
I don't know if I am right on this and I never know if I am right, but I know what trades I can take and what I can stomach and this setup is something that I am comfortable with. Although I LOVE my Netflix service and all of my kids do too, I'm not a bear on Netflix, but just thinking the chart is overbought here.
Tim 6/16/2014 10:09AM EST 425.72 last (It hit 426 when I was typing)
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