NFLX Charts

Here are the charts I promised...

 This is the 4 hour chart, there are plenty more that all tell me this is most probably a volatility shakeout of new shorts, I'll show you why in a second, but this is all the same concept as the shakeout of new shorts in a Head and Shoulders Top, that enter on what Technical Traders call confirmation which is the break BELOW the H&S neckline.

15 years ago this was a fantastic set up, since everyone went to online brokers and Technical Analysis, it's a fantastic set up if you know where to enter, you just can't enter at the break of the neckline anymore as that seems to be one of the fastest ways to get shaken out of the trade for a decent loss.

Here's a 60 min chart, some might call this "Oversold", I don't like terms like that, the facts that I have seen over the years suggest that Wall SZt. is just taking advantage of predictable trader actions and reactions and using the dogma of Technical Analysis which is entrenched by books like, "Technical Analysis of Stock Trends" by Edwards and Magee, long considered the bible of T.A. and many concepts there (although updated in about a dozen editions) are nearly a century old.

I sometimes assume that you see the cycles and the stages, but I shouldn't do that so I'm pointing them out here, stage 1 accumulation, stage 2 Mark-Up, Stage 3 Distribution/Top (which actually starts later in stage 2 and stage 4 Decline.

Just like the stage 4 of a H&S top, decline, which starts at the break below the neckline, it is very common to shakeout new shorts in what I call a volatility shakeout because they are predictable, their stop placement is predictable and its easy money.

I'm also pointing out that the 60 min chart is purely negative, so any bounce/counter trend rally is not likely to be anything more than that. In other words if I'm short NFLX as a trend trade with a 6 month horizon or more, I'm not concerned at al about a bounce/countertrend rally here.

The 30 min chart is where we first see a positive divergence, it's easy to accumulate in early stage 4 as there are so many new shorts providing supply at lower price levels and they don't seem to be too concerned with "who's on the other side of the trade".

 This is the 10 min chart, a "W" like pattern is in place already, just watch for the shakeout/stop run on a short term intraday basis.

This provides a great/cheap entry and low risk as a stop can be "REASONABLY" placed below the "W", not at an obvious level where other traders would place a stop; I'm always in favor of fewer shares for a wider stop, at least you have a better chance of letting the trade work and you can always add to it.

My target is based on the size of the base as well as the area I suspect BTC stops would be placed.

This is today's intraday action near the bottom of the base, thus it looks pretty timely.