Trade IDea/ Follow Up: (Swing Trade) NFLX

Last Thursday, July 24th I posted, NFLX Trade Set-up looking for a near term bounce (likely in to a small island-like gap) which can be used to short in to (this is one of the stocks on the watchlist that suggested a bounce in many of these assets, almost all setting up nice shorts.

This morning NFLX just broke under prior support (head fake/stop run) which is where I often like to trade these if I'm looking for a particular move. The gist of the post linked above was to use the bounce to short in to (I already opened a full size NFLX short and will be leaving it as is), however for anyone wanting to open or add to a NFLX short this could be a great opportunity.

The smaller trade and a bit more speculative is a swing-trade long for the bounce, I'll be playing that with an August (standard) $420 call which will also hedge the NFLX equity short which is down about 0.50%.

Here's the basics beyond last week's post...

 NFLX 10 min chart has the strongest bounce probability, but it wends there, I suspect this would be along the lines of a workable swing trade.

As a swing trade long (in case you want to take the smaller trade or do both and take the swing long until the core short sets up), this isn't a bad place as a stop can be placed just below current levels (I prefer on a closing basis).

 Here's former support being taken out this morning, volume is up as stops are hit. There's a fairly positive divergence on the move, but I suspect with a little more time and a little lateral trade, this will look a lot better.

 This is the NFLX 15 min chart and in white is a guestimate of the target area, a gap from a head fake move.

Of course all of the longer charts from 15 min out, like this 4 hour, look horrible in NFLX, thus I have no problem shorting it in to price strength at the right time, until then I think I'll take out a half size August $420 call for a bounce/swing type trade/hedge.