Sunday, June 21, 2015

NFLX Netflix Weekly Chart

A viewer would like a read on NFLX the darling of long traders this year. Netflix is the top performing chart of this year. Traders are throwing money at NFLX as it continues printing record highs. Long-time readers of the site will remember Keystone calling the exact bottom in NFLX in August-November 2012 due to the positive divergence. Ditto the pull back starting late summer last year due to the negative divergence. The stock has lots of momentum now. The daily chart wants price to pull back and take a rest for a week or two so a reasonable expectation is a retreat to 630-650 to finish June but note in the weekly chart above the long and strong MACD line, money flow and RSI exactly as price topped intraweek so price will likely want to come back up again to the current highs say in July.

In July, the weekly chart above will likely form with universal neggie d across all indicators which will allow a more substantive pullback. The monthly chart is cooked over the multi month and year time frame, however, in the very short term, say one to three months, the door remains open for price to print at the current highs or higher, call it 680-ish. A breach above 680 will lead to 720. The expectation is that NFLX will top out sometime in the July-September period at 670-720. It would not be surprising to see NFLX at sub 550, even sub 525 to end the year.

To  recap, a pullback to finish the month of June is on the table say about 15 to 30 points lower, then a quick recovery higher again to 650-680. At that time reference the above weekly chart to see if negative divergence exists across all indicators (especially the MACD line rolling over) and that will lead to more of a multi-week pullback say into late July. Price should make another run higher after that and top out sometime between late July and September. Choppy sideways is the order of the day through the summertime and then a roll over and weak finish to the year with price well off the top. In early 2016, NFLX would be expected to be around the 500 level.

If contemplating a short play, which is extremely dangerous for a momo stock, in the VST to finish June, a nimble trader may squeeze out a successful trade but the preference would be to wait until the first few days of July and make sure the MACD line goes neggie d on the weekly chart above and that will greatly increase the chance for success on a short trade over the short term. 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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