Setup for NFLX – 12/5/22

Today I want to take a look at Netflix. We all love Netflix, at least watching it. But if you bought it at 700, which was the its all time high, then you’re not too happy right now. The stock hit as low as 162 and seems to have bottomed there. It’s practically doubled since the bottom, closing at around 320 on Friday 12-2.

You’ve got some resistance in the 320 to 322 level. If you can get through 322 with volume then it’s got at least until the 340 area, probably between 340 and 350, which is another 20 to 30 points. Of course a lot will depend on what the overall market is going to do. If the entire market moves higher, Netflix could break through this resistance. If the entire markets gonna move lower, NFLX can head back down to the 300 level. You’ve got 28 points up and 20 points down, so you wanna wait and see what you know how Netflix is going to react to this 322 resistance level.

Now if you wanted to try and anticipate the move and go long here, you’d want to put a stop below the 34ema, which is around 310-311, so you’ll be taking on a nice amount of risk. You could also put a tighter stop at around 315 and see what happens.

I would just rather wait and see how NFLX reacts to the resistance level. If it breaks through then go long and if it fails then think about going short.