Protect Yourself on Netflix

 | Oct 11, 2017 | 3:27 PM EDT
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Netflix (NFLX) has been trending higher the past 12 months but with some "air pockets" along the way. Prices have doubled from their $98 October 2016 low, so we have done a pretty good job at discounting the future good news.

Can prices still work higher from here or are we due for a period of consolidation? Let's check the latest charts and indicators for clues.

In this daily bar chart of NFLX, above, we can see prices just bounced off the flat 50-day moving average line. The daily On-Balance-Volume (OBV) line has been neutral/flat since mid-July with a recent bump up. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line in positive territory, but it looks like the two moving averages that make up this indicator have begun to narrow.

In this weekly bar chart of NFLX, above, we have mixed signals. Prices are above the rising 40-week moving average line, which is a plus, but the weekly OBV line has not confirmed the price highs. The weekly MACD oscillator is positive but not robust.

In this Point and Figure chart of NFLX, above, we can see that a $165 price target has been met, but a decline to $183.60 on this chart will start to weaken the picture.

Bottom line: If long NFLX, I would suggest raising stop protection to a close below $175.

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