Stefanie Kammerman, the Stock Whisperer, to tell you the Whisper of the Week: GLD and SLV in my week...
Traders Should Watch This Level in Netflix (NFLX)
07/28/2015 7:00 am EST
On Monday, technician Corey Rosenbloom, of AfraidToTrade.com, takes a technical look at this on-demand Internet streaming media provider stock, points out a clear price level to watch for clues to the future action, and how traders can possibly use this level to their advantage.
After a price surge and gap higher, Netflix (NFLX) shares are retracing in an ongoing uptrend.
For traders, there’s a clear price level to watch for clues to the future action and opportunities.
Let’s pinpoint this level and update our price targets for Netflix (NFLX):
We’re seeing the 30-min Intraday Chart above with two key Fibonacci Retracement Grids drawn for you.
The first grid begins with the $92.30 per share swing low from July while the second grid is the bottom of the gap.
Both grids are drawn to the $117.00 level, which was the gap and run spike high on July 16.
Let’s first focus on the tighter 38.2% level of the gap, it is $110.00 per share exactly.
After multiple days of support, price broke under this level last week and traded down where we are now at the $108.00 per share loose confluence.
Note the 50% or halfway retracement of the gap; it’s also the 38.2% retracement of the intraday swing.
For now, our focus as traders should be on this $108.00 dual Fibonacci confluence.
We’ll be neutral/bullish above $108.00 and bullish for a breakout and continuation swing (potential) above $110.
However, look very closely at the $105.00 per share level.
It’s also a dual Fibonacci retracement confluence as drawn, it’s the 61.8% retracement of the gap, which overlaps the 50% retracement of the larger swing.
In other words, if price (sellers) breaks under the $108.00 level Monday, it’s likely to fall all the way to the $105.00 per share level, which would be the next potential bounce (buy) target.
And to plan further into the future, if sellers break price under $105.00, then the next stop on the downswing (target) would be the $102.00 level.
There’s something else important about $105.00 per share…
The rising 20-day EMA (exponential moving average) is moving rapidly toward $105.00 per share and currently trades just above $104.10.
In other words, if buyers do not step up here at $108.00, then their next chance to enter this bullishly trending stock—and support-bounce it higher—would be the $105.00 triple confluence.
Either way you see it, our attention Monday should be on $108.00 for a bounce…and if sellers win the short-term victory here, price would be expected to fall lower toward the $105.00 confluence.
If so, short-sellers have a quick, narrow window to play a $3.00 fall…while buyers could build their next trade off $105.00.
Use these levels to your advantage as you plan and trade Netflix (NFLX).
By Corey Rosenbloom, CMT, Trader and Blogger, AfraidToTrade.com
Related Articles on STOCKS
As the world faces an increasing onslaught of new threats from biological and chemical weapons, viru...
Hologic (HOLX), a leading provider of mammography equipment and diagnostic services for obstetrician...
International Game Technology PLC (IGT) designs, manufactures, and markets electronic gaming equipme...