Sunday, November 24, 2013

NFLX Netflix Weekly Chart Overbot Rising Wedges Negative Divergence

Future Fed Chair Yellen does not see any asset bubbles in markets. NFLX explodes from 70 to 350 in one year's time, +400%, moving upward at a pace of +3.3% per month non-stop. Yellen says nope, no bubbles here, move along, move along. Last year Keystone highlighted the bottom with the falling wedge, oversold conditions and negative divergence. At the time, late summer 2012, nearly every trader said to avoid Netflix like the plague and it will collapse moving forward. That was the bottom. Nowadays, everyone is so impressed why the stock will never stop going up, the exact opposite sentiment. NFLX is topping out. It can be shorted here or higher. If long, exit stage right. Netflix will receive lots of attention when it receives its spank down. There is an underlying common theme occurring for the high-flyers such as TSLA, LNKD, AMZN, NFLX, and the biotech stocks, healthcare stocks and the dividend stocks which may follow the parade lower.

The red rising wedge, negative divergence (red lines) and overbot conditions (RSI and money flow), along with the price extension (pink dots), all say down. The blue long-term rising wedge adds excitement to the days and weeks ahead since the drops out of rising wedges can be quite dramatic. Stay long the Netflix movies, continue watching plenty of them, this plan forward is smart, however, long NFLX is no longer attractive, time to git while the gittin' is good. For speculative traders, NFLX can be shorted from here and higher. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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