There was some interesting price-action in NFLX Monday. This was the third bounce off of $475(ish) support since this summer. (Or the fourth or fifth bounce, depending on you choose to count it.)
This resilience is all the more impressive since NFLX had two disappointing earnings reports during this period and the stock tumbled -6.5% and -6.9% the day after each earnings report. Yet here we stand, still within 10% of all-time highs.
Bad news and a resilient stock? That’s a textbook case for a stock that wants to go higher.
Anything that refuses to go down will eventually go up. And right now, NFLX is acting like it wants to go back to the highs. And if it gets back to the highs, expect it to keep on going.
This is buyable with a stop under $500. If it keeps rallying, great, move our stops up and see where this move takes us. If it stalls and retreats for the 4th time, no big deal, we sell at our stop and try again next time.
As always, start small, get in early, keep a nearby stop, and only add to a trade that is working.
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Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.