Netflix in Favorite Trader Pattern
05/09/2011 12:33 pm EST
The stock, despite much volatility in the straight stock market, is quickly reaching an attractive position for a call option.
We’ve spent a fair amount of time on Pullback-Off-Highs chart patterns, and one look below at Netflix, Inc. (NFLX) pretty much tells the story. Keep in mind, this name is prone to large mood swings on a daily basis. That works for you and against you.
For us, a big part of our success around here has been that of the Pullback-Off-Highs long-side trade set-ups of leading stocks in clearly defined uptrends. It’s really the only pattern you’ll ever need to know in up-trending markets.
Here’s a daily chart of Netflix:
As you can see this issue is in a clearly defined uptrend pulling back off of its highs. It has also pulled back to a prior support level and above the 50-day average. Those levels tend to act as supports.
We are going to continue to stalk this issue until it stages an upside crossover of the pink line. At that time, we will step in and buy a call option on this issue.
By the Staff at AllAboutTrends.net