Want to know how to trade Netflix tomorrow morning? This should help. (January 22, 2018)
NFLX DJ-20 ARCB YRCW NFLX YRCW NAV
I want to look at Netflix ( NASDAQ: NFLX ) but also a couple other stocks, which I will get to in just a second in this Free Chart video.
Netflix ( NASDAQ: NFLX ). They reported earnings, they guided higher if I recall correctly, it has been about an hour or so since I looked at it. I think they met their expectations but the big deal is the future, that is what traders look at. When the company guides higher it is all good typically. Unless the market has really been expecting that then they can kind of sell that stuff. Here you can see what happened after the close. They reported earnings and virtually immediately ramped up to about 248.00. Some sad sack bought this at 249.95 thinking he was going to get it just before the breakout. Maybe he did but it isn’t going to be tomorrow, at least I don’t think so.
The reason I want to look at this is because this COULD be a good shorting opportunity. But one thing I will say first is if you are long this stock if you held it over earnings, it is up a lot, it is up 9 percent and that is a lot for a stock that just after Christmas was down here. So basically it is up 33 percent in not too many days, basically a month or so, if that. I want to look at it in this chart though: These are Sigma Bands, three standard deviations. The way this trades is, it is kind of against the rules of statistics for a stock to be outside this upper Bollinger Band, third standard deviation. So right now this is at 245.95 and you can see the stock is actually trading at 248.00. It is interesting how these kind of pan out, isn’t it?
This is what I would do: I would just look at 250.00; if the stock starts trading above 250.00 then stay the heck away from it. Just let it go or if you are a momentum trader go ahead and buy some and see if you can make a buck. It just seems to me like this is something that will be sold into. So if you can look at 250.00 as a ceiling then you can be shorting this stock, not as it rallies but if it looks like it is petering out (I will be in the forum tomorrow morning, we can do this together), if it looks like it is petering out that is when you short it. And then you put a buy stop just above 250.00. So it is actually a low-risk short because you are able to keep your stop very close to your entry.
Now, I want to look at a couple stocks and I will tell you why, because I forgot to go over them in the Strategy Session and I think there are some pretty good ideas here. The transports ( INDEXDJX: DJT ) are up, right? I saw a conversation between a few different people in the forum so I wanted to cover these things.
ArcBest ( NASDAQ: ARCB ), these are truckers. Almost half a million shares traded; popping out of a volatility squeeze. Earnings on the 31st and this is coming out on volume. I think you can be long this stock now. Then if it goes above 40.00 then go ahead and add some more. That is your trade for ArcBest ( NASDAQ: ARCB ).
Then YRC Worldwide ( NASDAQ: YRCW ); it kind of looks like it is a couple days ahead of ArcBest ( NASDAQ: ARCB ), doesn’t it? The way this thing really traded was, this was the original breakout and then that was kind of phase 1, I guess. It is a little bit of an aborted breakout and then finally, Boom! The high back here was about 15.80. and so then on Thursday the stock broke out. So this would have been kind of a breakout buy point here and now the stock is up a ways from there.
The way this is trading it does look like it has a ways to go. You could be saying, “Well, wait a minute it is up at this top Bollinger Band, which you said should be avoided and it never touches.” Okay, a couple things. First of all, when it comes from a squeeze, when it is a really tight range like this as opposed to this where it really wasn’t tight at all, breaking out and pushing above the upper Bollinger Band is a good thing. But also here, it never really did close above it so it still kind of fits into our framework.
And then the last one here, Navistar ( NYSE: NAV ). This is a little bit behind the curve. I would say if the stock starts trading above 47.00 that is when you really want to start paying attention to it and maybe buy a little bit. And then when it rallies up above the December 19th high of 47.47, we will say 47.50, then that is when you would add to that.
That is how I would trade these stocks. Nice job you guys in the forum; I really appreciate all your help.
Free Chart