NFLX (Core Short) Follow Up

Yesterday I put NFLX up yesterday because in my view...

"NFLX did everything it had to do to form a great double top in the new technical analysis.Looking at NFLX, my judgement tells me there's probably a little better entry, my gut tells me, "Who cares?"

 This is the gist of yesterday's post, the head fake double top which is an excellent long term core short entry with very little risk as stops can be placed just above recent highs, although I prefer a little room.

The Core Short Position in NFLX is nearly filled out, but I'd love to add a little here if I can, I just don't think the risk management parameters will allow me to add much more than maybe 10% of what's already in place.

I wouldn't want to chase NFLX here today on a 4+% move down, but I'd say generally speaking, any position or add-to ABOVE $300 is a decent area for the long haul which is what these core positions are meant for, trending trades.

This is the triangle that formed yesterday. Once again, Technical traders get taken for a ride, the sym. triangle has no inherent bias, it depends of the preceding trend which was up, so it becomes a consolidation / continuation pattern that technical traders expect to break to the upside, this one clearly did not which is what manipulation of Technical traders is all about. Sometimes there's a head fake breakout move to suck in more longs, sometimes there's a Crazy Ivan that will break on both sides of the triangle to clear all orders, both limits and stops before moving down. The fact there was a triangle right above the double top, was why I really didn't care if there was a slightly better entry (which there was after NFLX was posted yesterday. 

Symmetrical triangles were published at least as early as 1948 in John Magee's "Technical Analysis of Stock Trends"  that is now in something like its 10th edition, it's pretty much the text book of T.A. that most everything else derives from although Charles Dow did Technical Analytical work in the late 1800's that others added to.

 Since most stops around the $300 area have been cleared several times, it will probably take a move a bit lower to hit some of the stronger hands.

I'd consider NFLX a short on any bounce above $300. The $318 area looks interesting, I'd also leave a little dry powder for a move above $328.50, not a lot, but some.

 NFLX charts yesterday looked horrible as they do today...

but there are still a couple that haven't been completely destroyed so there's still a chance for a decent entry on a bounce.

 It may look something like this... If it were me steering NFLX up here, I'd go for the stops just under the $297 area, but it already looks like quite a few are capitulating just on fear...

This is broader selling, there's no specific spike at a price level so I don't think it's stops, it looks more like fear or capitulation.

After I hit stops under $297, I'd take NFLX (with all the shares I accumulated on the cheap under $300) and bounce it up to at least $320, ultimately over the next few days if I could get it above $330, that's where I'd take it...Just thinking like a crook.

They'd need to distribute shares picked up on the cheap on the way up, I'd expect a large portion to be distributed right above $300 and then the rest the closer we got to the apex of the triangle. I'M SURE THE BULK OF THE INSTITUTIONAL SHORT IS IN PLACE LONG AGO, THIS WOULD JUST BE A CHANCE TO AVERAGE UP THE ENTRY PRICE A BIT.

The 4 hour chart continues to fall apart so I don't think it will be much longer before there's irreparable damage, actually I think we are already past that point.

Keep an eye on NFLX, I'm setting some price alerts and see if I can add, being there's so little room (if any) to add, I'll be looking for the best area possible which is close to the apex of the triangle.

In my view, AMZN and NFLX are two shorts at the top of my list.