Breakout and Trade Target Planning for Netflix NFLX
Like many other similar stocks today, Netflix (NFLX) generated a potential breakout buy signal on a shattering of overhead resistance.
Let’s focus our attention on a near-term upside target along with an Open Air breakout pathway should the next higher target also fail to hold the onslaught of recent buying pressure.
Here’s a simple planning chart of the Trend and Fibonacci Reference Levels:
The chart above shows a persistent uptrend in motion (from mid-2012’s support shelf and impulsive break above $100 per share) that reversed initially into the $450 per share level.
We’re seeing a similar situation occur in Apple (AAPL) above the $600 level as I highlighted with this morning’s post.
Price retraced all the way back to the 38.2% and price confluence into $300 per share which – of course – is a key level that buyers MUST hold firm (and so far, they have done so successfully).
This led to a push up from positive divergences into the current $350 pivot level from which today’s breakout and short-term buy signal occurs.
Let’s step in the perspective to see the breakout and two upside target levels to play for should be bullish action continue:
The $356 per share level was the falling 50 day EMA along with the new 38.2% Fibonacci Retracement (to the upside) at $360 per share.
Buyers shattered both of these levels – at least so far – and our attention now is on whether price holds above $365 (which is a bullish signal that immediately targets $380) or else fail to hold today’s gain which would ‘trap’ traders and likely create a short-sale breakdown (Bull Trap).
It’s the $360/$365 level that will help us plan the next set of trades.
Again, a continuation impulse here should target the Fibonacci and Price Resistance cluster near $380 per share.
If this happens, expect a pause/consolidation or retracement against this level initially.
However, if buyers also shatter this resistance ceiling, look to play another potential breakout impulse as price enters “Open Air” above $380 toward $400’s 61.8% Fibonacci Target (and beyond that should buyers also squeeze above $400).
When planning trades, focus on the near-term levels and short-term targets – then monitor price as it moves toward or away from these levels (trade strategies – even on the intraday frame – develop within this context).
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
On Monday, May 19, 2014, Global Dividend Growth Excluding The US, DNL, a Large Cap Blend ETF, likely peaked out, as Industrial Growth Sectors, FXR, PSCI, RZG, SOXX, XTN, and included such stock as MHK, AXE, TYC, ROK, FLS, CFX, EMN, DOW, DAKT, BHE, CR, IR, MEAS, ROC, RPM, POL, ECL, SXT, KWR, CHMT, WOR, KS, BERY, AOS, GPK, MAS, CTAS, SEE, TXN, F, MU, QCOM, GMED, COO, DAL, as well as other High Beta Sectors, KRE, KCE, PNQI, IGN, FDN, IBB, IGV, traded higher on the day, largely on recovery trading from last week’s sell off; and as Emerging Market High Dividends, EMHD, and Emerging Market Financials, EMFN, traded to new rally highs, on higher Emerging Market Currencies, CEW.
Corey, you have failed to recognize that an economic paradigm shift occurred on May 13, 2014, with the trade lower in the Euro, FXE, and thus failed to work in the investment strategy that in a bear market one sells into pips, just as in a bull market, one buys into dips.
The seigniorage, that is the moneyness of the Banker Regime, started to give way more fully today as traders derisked from debt trades and delveraged out of currency carry trades in Australian Equity, AUSE, KROO, EWA, WBK, BHP, on the trade higher in the Yen, FXY, and a trade lower in the Australian Dollar, FXA. And likewise they took flight from the Middle East Equity, GULF, MES. All as Zero Hedge posts Conflict Between China And Vietnam Is Imminent – China Piles Troops, Tanks, Artillery And APCs Near Vietnam Border.
German Small Caps, GERJ, traded lower as Deutsche Bank, DB, traded lower.
Brazil, EWZ, EWZS, traded lower as Brazil Banks, BBD, BSBR, traded lower, as Spain’s Bank, SAN, traded lower.
High Yield Interest Rate Hedge, HYHG, Brazil Electric Utilities, EBR, CPL, ELP, PAM, DEP, and US Electric Utilities, XLU, PUI, traded lower as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.54%, and steepened the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, which is seen in the Steepner ETF, STPP, steepening.
Junk Bonds, JNK, and Ultra Junk Bonds, UJB, traded to new all time highs, while Aggregate Credit AGG, traded lower, on lower 30 Year US Treasury Bonds, EDV, and lower US Treasury Notes, TLT.
The bond vigilantes took control of the Benchmark Interest Rate, ^TNX, when it traded higher from 2.49%, on October 23, 3013. And today May 19, 2014, they reasserted their control over this Benchmark Interest Rate, by calling it higher yet to 2.54%, reflecting that the Rider on the White Horse, seen in Revelation 6:1-2, has the Bow of Economic Sovereignty, and is effecting economic coups throughout the world, as is seen in the political instability in SE Asia, and as is seen in the Ambrose Evans Pritchard report Putin To Give Ground In China To Seal Gas Deal. The long coveted prize would allow Russia to switch sales from Europe to the Far East and transform the Eurasian gas market. Higher interest rates globally mean economic destabilization and economic deflation, coming largely from investors derisking out of debt trades and deleveraging out of currency carry trades.
Given this model, look for High Yielding Debt, JNK, LWC, EU, EMB, HYD, EMLC, EMCD, BABS, HYXU, PZA, to trade lower in value. And look for Market Leading Banks and Financial Institutions to begin to rapidly fall lower in value; these include, BOFI, IBN, SAN, BSBR, ITUB, BAP, BCA, SHG, WBK, GGAL, BMA, IX, CIB, RY, BNS, PUK, GNW, TMK, BANF, CBIN, TFSL, SFNC, CNS, LM, BR, VOYA.
Air breakout pathway should the next higher target also fail to hold the onslaught of recent buying pressure.
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