Netflix NFLX Bullishly Breaks Out of its Triangle

Oct 3, 2016: 11:15 AM CST

If you’ve been bored of Netflix’s recently stagnant stock, you’ll want to perk up and pay attention today.

After compressing into a short-term triangle or range through 2016, we’re finally seeing a potential breakout.

Risks remain – just look at April – but for now, we’re actively monitoring the breakout beyond $100.

A wide-range ($80.00 to $105) triangle price pattern developed as price remained UNDER the falling 200 day SMA for most of 2016.

We saw a little BULL TRAP in April when price broke higher on weak volume, only to see shares collapse beneath the key 200 day SMA.

From there, the triangle developed clearly as the 200 day SMA served as resistance and price bounced up from a rising trendline.

We’ll need to see how price closes today and compare the volume today (is it much higher than average?).

However, as long as price remains above $100.00 per share, we’ll expect it to continue trading higher in a new short-term bullish phase toward (at least) $110 or higher.

Here’s the weekly chart for a bit more perspective – and to highlight how long this triangle developed:

Despite high volatility in late 2015, price settled into a stable trading range in 2016 with a “Midpoint Magnet” near $95.00 per share.

Technically price broke through a weekly chart trendline around August, but we didn’t see the impulsive buying power sweep shares higher.

The general consensus – from the pattern and higher timeframe UPTREND (which remains in play) – is that price should continue higher.

Use $100 as your focal point for another possible Bull Trap and have fun trading this popular stock!

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Corey Rosenbloom, CMT

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4 Responses to “Netflix NFLX Bullishly Breaks Out of its Triangle”

  1. Intelligent Trend Follower Says:

    Thanks for the detailed trade idea. This is a great pick that I’ll be sure to keep an eye on as the market action unfolds this week.

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