NFLX Follow Up

There were two posts re: NFLX yesterday, 1 was for a quick trade (perhaps a day trade) and the second post was a follow up with charts when price was $84.48. NFLX lost some ground on the day yesterday and gapped down this a.m., but the longer term position we have been looking at for NFLX is a pullback followed by a mov to the upside. In my view I'm not very interested in playing the pullback beyond the short term trade from yesterday, I'm interested in buying price weakness with 3C positive divergences in to a pullback for a move higher.

Lets take a look at NFLX today.

 Here's the area where we looked at NFLX for an intraday trade yesterday.

 Using the custom X-Over Screen to prevent false crossovers, we see a short signal and a recent long signal. Normally the second pullback would be to the blue 22 bar price moving average as the first pullback ha already occurred at the 10 bar yellow average, so it seems we still have some consolidation ahead of us, this lets the trade come to us at a better entry, higher probabilities and less risk.

 The 30 min 3C chart shows a negative divergence at this flat range suggesting a deeper pullback as this has so far corrected through time.

 The longer, more important 60 min chart ha a nice positive/leading positive divergence suggesting NFLX still has quite a bit of upside left in it, however even on this chart there are signs that a pullback is the most likely course before higher highs are put in.

 The intraday 1 min chart shows a very slight positive divergence at the opening gap lower and a very slight negative divergence as the gap was filled this morning.

 On the 2 min chart, none of those divergences migrated over so they can't be that strong, I view this as a simple gap fill on an op ex day that will likely pin somewhere in the area we are in. I would expect more downside from NFLX and we'll be watching for positive divergences showing accumulation in to a pullback, that's what we want to buy.

 The daily Trend Channel has a rough pullback target that is similar to the X-over screen, but because of the 15 min negative divergences on many of the market averages, I have mentioned that a pullback could be more severe than what we normally associate a pullback with, thus a pullback in NFLX is likely to be deeper than this daily trend channel.

The 5 day trend channel has held the NFLX up-trend for almost 3 years, this is probably the extreme side of a pullback, but it would suggest that NFLX holds above $69, but we could see a pullback near that area, that also makes a little more sense to me considering what we are seeing in the broad market. I wouldn't toss NFLX aside, this could be a very nice trade that comes right to us with a low risk entry, I'd keep it on your radar.