Long NFLX Trade
Bullish Reasoning:
1. Small Bounce off the 50 SMA today
2. Bounce is also at an old resistance point/ supposed new support level
3. Also confluence with the .5 Retracement of the Feb lows with the March highs
4. SPX still above 200SMA. Although it hasnt been pointed out much, the Nasdaq is ALSO at a "double bottom" (if you take hitting the moving average again as a double, which is debatable, but I is something I personally believe in. If we double off of a moving average, we do not need to double off of the price action, IMHO.) The Nasdaq's double moving average bottom hasnt been pointed out much because it is at the 150 SMA, which is a weird one, but one that the Nasdaq seems to be reacting to nonetheless.
As I have pointed out in another trade idea, I am long the SPX via the SPXL into tomorrow. If the SPX falls under the 200SMA, or the Nasdaq falls under the 150SMA, this NFLX trade will be invalidated and should be immediately sold. A short position, in my opinion, would be advised at that point, especially on anything tech. The 150SMA is the only thing holding the NASDAQ from hitting the 200SMA, and it would most likely happen very quickly.
Fundamentally, Netflix has been the growth of all growth stocks for the past two quarters, expanding overseas at constantly booming paces. It gapped up over 10% last earnings FOR A REASON! If the Nasdaq and S&P do bounce tomorrow, I expect Netflix to lead the way with the other growth stocks which have been taken down regardless of fundamental change. I think it is important to note that out of FANG, Netflix may be the most (and possibly only) solid fundamental story left (this week, at least...). Anyways, I am long going into tomorrow.
The trade itself is a quick pop back to the .5 retracement of the last move. This would be a little over 7% upside, with around 3.5% downside. You could easily take this trade with less of a downside stop and improve your R/R, but I like adding (what is sometimes too much) some standard deviation to my support lines (its still an unscientific process because i'm too lazy to think about it... if someone smarter and more awake then me has the answer let me know: How would one calculate standard deviation of a support level? View how the stock has reacted to prior support levels? Use bollinger band or moving average type averages to make StdDev out of? I've gotta think on this one, please let me know if you've got an idea.
Disclaimer:
This is not financial advice or trading advice. I am not a financial analyst or anything of that nature. This is meant to be educational or for entertainment, but only for those two purposes.
1. Small Bounce off the 50 SMA today
2. Bounce is also at an old resistance point/ supposed new support level
3. Also confluence with the .5 Retracement of the Feb lows with the March highs
4. SPX still above 200SMA. Although it hasnt been pointed out much, the Nasdaq is ALSO at a "double bottom" (if you take hitting the moving average again as a double, which is debatable, but I is something I personally believe in. If we double off of a moving average, we do not need to double off of the price action, IMHO.) The Nasdaq's double moving average bottom hasnt been pointed out much because it is at the 150 SMA, which is a weird one, but one that the Nasdaq seems to be reacting to nonetheless.
As I have pointed out in another trade idea, I am long the SPX via the SPXL into tomorrow. If the SPX falls under the 200SMA, or the Nasdaq falls under the 150SMA, this NFLX trade will be invalidated and should be immediately sold. A short position, in my opinion, would be advised at that point, especially on anything tech. The 150SMA is the only thing holding the NASDAQ from hitting the 200SMA, and it would most likely happen very quickly.
Fundamentally, Netflix has been the growth of all growth stocks for the past two quarters, expanding overseas at constantly booming paces. It gapped up over 10% last earnings FOR A REASON! If the Nasdaq and S&P do bounce tomorrow, I expect Netflix to lead the way with the other growth stocks which have been taken down regardless of fundamental change. I think it is important to note that out of FANG, Netflix may be the most (and possibly only) solid fundamental story left (this week, at least...). Anyways, I am long going into tomorrow.
The trade itself is a quick pop back to the .5 retracement of the last move. This would be a little over 7% upside, with around 3.5% downside. You could easily take this trade with less of a downside stop and improve your R/R, but I like adding (what is sometimes too much) some standard deviation to my support lines (its still an unscientific process because i'm too lazy to think about it... if someone smarter and more awake then me has the answer let me know: How would one calculate standard deviation of a support level? View how the stock has reacted to prior support levels? Use bollinger band or moving average type averages to make StdDev out of? I've gotta think on this one, please let me know if you've got an idea.
Disclaimer:
This is not financial advice or trading advice. I am not a financial analyst or anything of that nature. This is meant to be educational or for entertainment, but only for those two purposes.
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