Netflix is Preparing to Stream
- Posted by Greg Harmon
- on November 15th, 2012
Netflix, $NFLX, has exhibited crazy price action over the last year. Loved, hated and now loved again. On the most recent joy ride higher it is now breaking an ascending triangle into resistance at 80. But if you want to be precise, this could be a rising wedge, signalling a more cautious tone. Either way the stock seems to be setting up for a crazy move. Over 81 it has a Measured Move higher to 100 with resistance at 85 and 90 along the way. Below 78 it looks to easily retest 70 or 65. The Relative Strength Index (RSI) is bullish and supports the break higher, while the Moving
Average Convergence Divergence indicator (MACD) is positive but very near a diverging bearish cross to negative. From a long term perspective the 3-box reversal Point and Figure chart sides with the upside break, but will also continue to do so until it falls under 75. The accumulation/distribution indicator has been rising but is also confusing the picture as it is now moving lower. What to do? Set alerts for the break either way to be prepared to play this volatile name.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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