NFLX Daily Chart – April 14, 2016
NFLX has played these past weeks according to our forecast, and if 0.764 extension is not tested, especially if price does not close above that level, NFLX should be headed towards the lower target (C).
As indicated in the chart, all of this rally (our March 20 report)has taken place under declining volume, which is a major red flag for the continuation of the trend. As EW theory states, volume dries up in corrective cycles, and that’s what we observe in this case.
Our strategy for the time being is skewed to the short side given the wave count and the divergence in volume. The only way to invalidate this scenario is if NFLX breaks with considerably higher volume 0.764 extension level (which seems less probable for the moment).