NFLX
NFLX
tends to demonstrate very volatile trading following quarterly earnings release. Tonight should be no different. on the daily chart, we can see NFLX has made a lower high since the All-Time-High in 2018, however the strong bullish trend of the weekly/monthly charts has provided sufficient momentum with dip buyers showing up after most sell-offs. The base-case should be a LONG, but there is evidence that this time, the SHORT will be the favored position, at least in the shorter term. During 2019/2020, we can see competing parallel channels with the bears getting trapped on a test below (near 251), but bulls approaching the beginning of what should be considerable resistance. This provides a compelling risk : reward ratio. We also have an un-filled gap near the opening price following the previous quarterly ER trading around 308-310. that is the first and most obvious downside target. It's reasonable to expect a test of the psychological support of 300 if we approach it with high volume, and that's exactly what I would expect following a poor response to an ER. NFLX likely gives at least 1 more long-sided opportunity to dip-buyers on that first 300 test. I would be looking to flip long on the first sign of bullish divergence or other bullish reversal signs.
On the upside, bulls need a gap above 350 to challenge 365....while this is, of course, possible, especially given the higher time-frame bullish momentum, if traders attend to fundamentals, there's a good chance industry competition is creeping in on NFLX thin (or non-existent?) margins. We saw what happened in 2018 when member sign-ups began to drop. If this occurs again, a push to 365 is likely to bring on sellers. A blow-out quarter may even see sell-the-news if traders see resistance holding...unless we gap above 365, then anything is possible.
NFLX
tends to demonstrate very volatile trading following quarterly earnings release. Tonight should be no different. on the daily chart, we can see NFLX has made a lower high since the All-Time-High in 2018, however the strong bullish trend of the weekly/monthly charts has provided sufficient momentum with dip buyers showing up after most sell-offs. The base-case should be a LONG, but there is evidence that this time, the SHORT will be the favored position, at least in the shorter term. During 2019/2020, we can see competing parallel channels with the bears getting trapped on a test below (near 251), but bulls approaching the beginning of what should be considerable resistance. This provides a compelling risk : reward ratio. We also have an un-filled gap near the opening price following the previous quarterly ER trading around 308-310. that is the first and most obvious downside target. It's reasonable to expect a test of the psychological support of 300 if we approach it with high volume, and that's exactly what I would expect following a poor response to an ER. NFLX likely gives at least 1 more long-sided opportunity to dip-buyers on that first 300 test. I would be looking to flip long on the first sign of bullish divergence or other bullish reversal signs. On the upside, bulls need a gap above 350 to challenge 365....while this is, of course, possible, especially given the higher time-frame bullish momentum, if traders attend to fundamentals, there's a good chance industry competition is creeping in on NFLX thin (or non-existent?) margins. We saw what happened in 2018 when member sign-ups began to drop. If this occurs again, a push to 365 is likely to bring on sellers. A blow-out quarter may even see sell-the-news if traders see resistance holding...unless we gap above 365, then anything is possible.