NFLX Netflix Monthly and Weekly Charts; Channels; Rising Wedge; Triple-Top; Overbot; Negative Divergence; Upper Band Violations; Netflix Topping-Out on Long-Term Basis

Netflix is one of the big winners this year off the covid pandemic. One person's misery is another person's joy. When the US went into lockdown in March/April, NFLX bottomed at 290-ish and rocket-launched to 570+ in only about 14 weeks (3-1/2 months); a humungous +97% gain, a double (green circles on weekly chart). The September 2019 bottom is at 260 and produced a +120% gain in only about 38 weeks (9 months).

Sticking with the weekly, the red line for price shows a triple-top in play. There's an old Wall Street adage that there is no such thing as a triple-top. The insinuation is that triple tops always resolve with price moving higher from the third bump which then eliminates the triple top. However, Keystone does not subscribe to this philosophy since over the years after watching thousands of charts, it is more of a 50/50 proposition that the triple-top holds.

The red lines clearly show universal negative divergence so price does not have anymore strength to move higher in the weekly time frame. With the coronavirus pandemic on the rise again and trouble ahead for the US, folks will turn to Netflix again, but haven't they already seen all that boring programming once already? NFLX tagged the upper band so the middle band at 487 and lower band at 417, and rising, are on the table. Price moves through the blue channel all summer long into Fall and a drop out of that range will tell you that the rout is on. The brown channel may be the likely destination over the next year or so.

The monthly chart was mentioned a couple posts back. The NDXA150R, Keystone's bet-the-farm on the short side indicator (for Nasdaq and tech stocks), topped-out at an elevated 94% basically guaranteeing pain and misery ahead. In the monthly time frame, NFLX is topping-out first and will be followed by FB, AAPL and AMZN and then GOOGL and MSFT. All these big shots are singing their swan song and topping-out on a long-term basis between now and January. This will surprise a lot of people, or, actually will surprise everyone, since market participants remain universally euphorically bullish worshipping the Fed's unlimited and enduring power. The central bankers are the market, until they aren't.

The red lines on the monthly chart show the ominous red rising wedge pattern. The collapses from rising wedges can be quite dramatic. The red lines for the indicators show universal neggie d agreeable to a spankdown occurring and a long-term (months and years) top being placed for the stock. The MACD and money flow are trying to gather up some juice to try and extend the top but they should not amount to much. Their attempt at moving higher in the near term (last couple months) is due to investors believing in the coronavirus stay-at-home bullishness. Traders do not want to give up on the stock especially with the COVID-19 third wave now lapping at American shores.

The upper band is violated on the monthly so the middle band at 384 and lower band at 227 are on the table. Don't laugh. In a couple years, NFLX may be in the 120 to 320 range; it will not be surprising at all. If you remain long, you will not be laughing then. As a serious recession takes hold and more people are sh*t-canned from their jobs, household budgets are slashed. The significant others will sit at the kitchen table with wobbly legs, both their own and the table's, and trim the monthly expenses. Guess what gets cut first to save money that is needed to buy food, pay rent and utilities and try to keep up on insurances? Yes, the monthly fees for apps, cable television, radio, etc... 

As the weeks and months play out and the US slips deeper into a covid recession, many families will ditch or reduce services with NFLX, AAPL, GOOGL, CMCSA, and the list goes on, HULU, DIS, there are so many platforms now each with their hand in people's pocket but many of these services will be ditched because people will need the money to buy some hot pockets to eat.

Keystone wrote an article last year to help millennials and other young folks prepare for a recession. It is never too late to prepare and at least open your eyes to what is coming down the pike. The 1980-1982 Great Recession, the worst economic pullback since the Great Depression, changed Keystone's life forever. The coming weeks and months will change many of you young folk's lives forever. The article received widespread international acclaim; "Clueless Millennials Must Prepare Financially, Mentally and Emotionally for the Coming Recession; A PSA (Public Service Announcement) for Millennials Explaining the Ugly Realities of Economic Recession." Bruce Springsteen's The River was the theme song for the early 80's hard times; you young folks will develop your own theme song/s over the coming year or two.

These are historic and life-changing times. The US stock market is placing a major top as the year plays out. Plan accordingly. 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.

Note Added Tuesday Morning, 10/20/20: CNBC business television commentator Jim Cramer says NFLX, PTON, ZM, ROKU, PYPL, TSLA and SQ will all move higher until the coronavirus pandemic is brought under control. That is a gutsy call saying these stocks will continue moving higher for the next few months.