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.

NFLX 5m 15-04-2016

Long Play:

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.

Short Play:

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.

ES_F 15m 15-04-2016

Trade Well and keep in mind the long term forecast of NFLX!

M.H

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