Stock Trading Predictions & Technical Analysis: NFLX

Friday, June 11, 2010

NFLX - Moving in a Strong Up Trend

NFLX - BUY

NFLX is one of the rare stocks that has been holding up well since the beginning of the market's major down trend in May. Since the month of February, NFLX has been trending above its 20 day MA and most of the time towards its upper Bollinger Band. Only twice and briefly during the month of May did NFLX break below the 20 day MA. However, it quickly rebounded at the end of the month to resume its trend. One sign of strength is seeing the Stochastic trend in the 80-100 level. Although it briefly broke that trend in May, NFLX is now back around these levels. I do expect a little pullback from NFLX sooner rather than later, but only a minor one bringing it towards the 20 day MA. NFLX is a BUY, but it would be perhaps wiser to wait for it to pullback a little towards its 20 day MA and seeing it bounce back up before taking a long position. Based on the current chart, NFLX is definitely not a stock I would short. Whenever you decide to take a long or short position, even for the short term, it is always best to go with the major trend, and NFLX major trend is currently up.

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.