Home > Short-Term Trader > NFLX – Time For A Pullback

NFLX – Time For A Pullback

September 30, 2010 Leave a comment Go to comments

Several Nasdaq leaders look to have gotten well ahead of themselves, but the one that really sticks out to me from a set-up standpoint for a short trade is NFLX. The Nasdaq has had a hell of a run and looks poised to pause before making its next move. This would allow for several of the high flyers to cool their jets. (NFLX, AAPL, BIDU, AMZN, PCLN).

NFLX is demonstrating a "dark cloud cover" on heavy volume much as it did during August before pulling back ~10%. If NFLX follows a similar script this time around then we can expect a move down to the mid to lower 140's allowing the 20 and 50 day ema's to catch up.

Stepping back and looking at an even broader picture, via the weekly and monthly charts, we can see this monster looks close to reaching the precipice. But, before I go calling a top, which is a risky game, I will stick to the shorter term view that this stock has some retracement work to be done.

When betting against monsters such as NFLX, my preference is towards trading the options vs. a naked short.


Categories: Short-Term Trader
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