Traders Should Watch this Level in Netflix NFLX

Jul 27, 2015: 10:47 AM CST

After a price surge and gap higher, Netflix (NFLX) shares are retracing in an ongoing uptrend.

For traders, there’s a clear price level to watch for clues to the future action – and opportunities.

Let’s pinpoint this level and update our price targets for Netflix (NFLX):

We’re seeing the 30-min Intraday Chart above with two key Fibonacci Retracement Grids drawn for you.

The first grid begins with the $92.30 per share swing low from July while the second grid is the bottom of the gap.

Both grids are drawn to the $117.00 level which was the “gap and run” spike high on July 16th.

Let’s first focus on the tighter 38.2% Level of the gap – it is $110.00 per share exactly.

After multiple days of support, price broke under this level last week and traded down where we are now at the $108.00 per share loose confluence.

Note the 50% or “Halfway” Retracement of the gap; it’s also the 38.2% Retracement of the intraday swing.

For now, our focus as traders should be on this $108.00 dual Fibonacci Confluence.

We’ll be neutral/bullish above $108.00 and bullish for a breakout and continuation swing (potential) above $110.

However, look very closely at the $105.00 per share level.

It’s also a “Dual Fibonacci” Retracement Confluence as drawn – it’s the 61.8% Retracment of the Gap which overlaps the 50% Retracement of the larger swing.

In other words, if price (sellers) breaks under the $108.00 level today, it’s likely to fall all the way to the $105.00 per share level which would be the next potential bounce (buy) target.

And to plan further into the future, if sellers break price under $105.00, then the next stop on the downswing (target) would be the $102.00 level.

There’s something else important about $105.00 per share…

The rising 20 day EMA (exponential moving average) is moving rapidly toward $105.00 per share, and currently trades just above $104.10.

In other words, if buyers do not step up here at $108.00, then their next chance to enter this bullishly trending stock – and support-bounce it higher – would be the $105.00 triple confluence.

Either way you see it, our attention today should be on $108.00 for a bounce… and if sellers win the short-term victory here, price would be expected to fall lower toward the $105.00 confluence.

If so, short-sellers have a quick, narrow window to play a $3.00 fall… while buyers could build their next trade off $105.00.

Use these levels to your advantage as you plan and trade Netflix (NFLX).

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Corey Rosenbloom, CMT
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  1. Clues to Future Action for Netflix Says:

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