Like Netflix (NFLX)? Here’s how it gets to $400. (May 23, 2018)
NFLX
I want to just look at Netflix ( NASDAQ: NFLX ) real quick. The reason is because I think this is going to 400.00. Here is how I am doing it: We are looking at this flat top right here; you can see this stock was in this volatility squeeze and a really nice breakout. And then over the last few months you get this little consolidation. So this is a flat triangle, right?
The way I do this is, it is all just down and dirty stuff, it really isn’t that precise. A lot of traders try to make it precise but decimal points just give you the illusion of certainty but it is really not. Few things are really certain in the market. If we just look from the bottom here, the bottom of this last big sell-off to the top of the move, which is right about here, that is 67 points. I am looking at minimum moves so I back this off and I will even look for 60 points. So just generally speaking from bottom to top is about 60 points.
Then we will look at the breakout level here; I am going to call it 340.00. Add 60 points to 340.00 and what do you get? You get $400.00. So is there anybody here, if so raise your hand, is there anybody here that cannot envision Netflix ( NASDAQ: NFLX ) moving to $400.00 sometime over the next month or two? Probably not a month but you never know. Anyway, can you envision this because the one thing I do when I look at charts is, they are not predictive they are informative. They absolutely are not predictive.
This chart right here does not predict that Netflix ( NASDAQ: NFLX ) will not move to 400.00. It may move to 300.00; there is no predictive value there but it is a lot of information. And when you combine the amount of information that you can get (I am not going to do course here on chart analysis), but you look at all the information you can get from just looking at this stock; where the supply is, where the demand is, how the stock has traded, etcetera, etcetera. Then you combine that with looking at millions of charts throughout the years, certain tendencies are going to start popping out. That is what I am seeing here with Netflix ( NASDAQ: NFLX ).
This is kind of a combination volatility squeeze, continuation pattern. Today’s move was on much heavier than average volume. It broke through really a key area here of 340.00. So my suggestion is you go buy this stock. They don’t report earnings until July so you buy this stock and then keep maybe a 4 or 5 percent stop on the stock. I would not sell it unless the stock made it evident that this was a fakeout and the stock has traded clear back down into congestion. Maybe you will see a little pause here over the next day or two. If so that is your opportunity to buy the stock at a discount because I think it is going higher; my pick is $400.00.
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