As always, NFLX has offered us quite a show with its price action these days. Even though rally should slowdown at some point, that point is not now, not unless 108.13 is broken.
However, $2 confirmation (price now down to $108) is a huge distance and as a day trader I need to break down the movement, find levels on both sides and create strategies on both, long and short scenarios.
The pullback right after hitting a new high, came into 3 waves (A-B-C) and as represented in the chart below, I will keep an eye to 1.00 Extension as it has proved to be a strong level. If $110.13 is broken, I would like to see $109.3 hold if NFLX is to make a new high or at least test them. $109.3 corresponds to 1.618 Extension, and yesterday was quite a strong level as Bid was constantly holding there.
Yesterday’s rally was impulsive (5 waves up) and pullback was corrective up to now (A-B-C). Thus, my ideal long entry is $109.7 with Stop Loss at yesterday’s low. Take Profit should start from 110.00, 110.30, 110.8, and so on.
In addition: I will also need to see ES_F hold 2068.72 level in order to be more comfortable to go long NFLX today.
The first signal I need is to see futures break that level.
Secondly, I need to see NFLX test 111.2 and fail. In that case I will go short only half of the position I would go long. Stop Loss for this short will be in yesterday’s high and target near yesterday’s low if 109.3 level is breached.
Trade Well and keep in mind the long term forecast of NFLX!