Chart of the Week: NFLX
We are talking about Netflix today; NFLX is the symbol.
As you can see, the chart has made a really nice series of higher lows from the early part of March. It exceeded recently the February highs – a lot of sellers came in here at that time. But just a few days ago, Friday had this big move up and rallied through on Tuesday, and it’s consolidating over here.
I think it’s going to make a move above 400 rather soon – probably no later than the first week in July. We often see this stock make a big move leading into the end of the quarter. The end of the quarter will be in about a month from now, at the end of June.
Let’s take a look at the indicators here. We seem some really strong money flow here. MACD is on a buy signal. Good volume on the last couple of up sessions over here. We’ve had some really strong volume trends.
On-balance volume has been strong
One of the things that really caught my eye is the on-balance volume. Look at how strong this on-balance volume has been. The last time the stock made a big run at the early part of 2023 – January, February – we had a nice move up on the on-balance volume but not quite as steady as we see right now. This on-balance volume is a big key here for the stock remaining higher. Of course we have earnings coming out in July and anything can happen there, but that’s about a good seven weeks away.
We like Netflix here, it is a little bit overbought. Take a look at the relative strength over here. It doesn’t necessarily mean it’s a sell. What could happen is the the stock could pull back to this trend line over here – maybe 375-385 – and it would probably be a good spot to pull the trigger. I am long some calls and have been rolling some calls the last couple of sessions.
If you want to get involved right now, you might want to take a look at using some call spreads – buying a call and selling a higher call above it.
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