I generally don’t trade individual stocks. I usually trade the bull/bear ETFs for S&P, interest rates, precious metals and Euro, plus futures. But, with all the news recently about Netflix I thought I would check it out.
Netflix has crashed the past few months from a high in July at 304.79 to a low (so far) in late Oct. at 74.25. Ouch! On the weekly chart, in late Oct. Netflix overshot the 78.6% retracement by a bit. What ever momentum indicator you may use has been OS for several weeks. Also looks like a text book five wave decline. For the past couple of years, Netflix has had a fairly consistent 8-11 week low-low cycle. The Oct. low was week 9 from the last weekly low in Aug.
There was a huge gap down Oct. 25, must have been some news how another 100,000 or so subscribers canceled. Netflix isn’t going to go out of business. They’ve been pretty smart for many years, but seem to have made some blunders the past few months.
The technicals are warning to take a look for a bottom. “When there is blood in the streets, look to buy.” Even if Netflix only made a 38.2% retracement, the price would have doubled. This isn’t a specific trade recommendations, only an alert that the technicals as I teach in High Probability Trading Strategies all seem to say at least a weekly low may be near. Check it out for yourself.