In our March 12 analysis we expected NFLX not to continue higher than the previous $102 high but to break below the neckline of a possible Head & Shoulder:
We were short biased due to our expectation of this move being a B-wave but we clearly mentioned that any potential move above $100 and a break above the previous high at $102 could lead to the targeting of the upper-bound of the channel at $108-$110 area.
Our short trade did not fill for 30cents at $96.00 (1st target – see March 11 analysis) and we got stopped out. It was a risky trade going against the trend and this bullish channel but the R-R was promising.
As we see from the above 1h chart, NFLX held the lower bound of the channel by forming a complex trading zone (red wave 4) until it broke out to the previous high and made a slightly higher high.
We have Slow Stochastic and MACD indicators together to confirm possible tops in the coming days. Both of them are on bullish areas and we might see a fast move towards the red wave 5 this week to complete blue wave 3 or C. It is very important for NFLX to burst towards that target box sooner than later in order for this to be an impulse wave and not just a hidden b-wave of red wave 4 that might break the channel of the downside.
- For the bullish scenario, we expect the prices to stay above $100.20 and the target box to be reached in the 1st trading days of next week.
- In case the lower-bound of the channel does not hold then NFLX might be playing a complex wave 4 and if it goes deeper that $93 this will signal the bearish scenario.
Enter Long in these levels and the support area of the lower boundary of the channel
Target 1 = $105.00
Target 2 = $108.00