Netflix, Inc. (NASDAQ: NFLX)

Netflix, Inc., an Internet television network, engages in the Internet delivery of television (TV) shows and movies on various Internet-connected screens. It operates in three segments: Domestic Streaming, International Streaming, and Domestic DVD. The company offers TV shows and movies, including original series, documentaries, and feature films.

Take a look at the 1-year chart of Netflix (NASDAQ: NFLX) below with the added notations:

1-year chart of Netflix (NASDAQ: NFLX)

During the past month’s rise, NFLX has been climbing somewhat of a trendline support (green), while also stalling in the $380 area (blue). The $380 level was also the key breakdown point back in July. A push back above the $380 level will mostly likely lead to higher prices for the stock.

The Tale of the Tape: NFLX is trading between a key level of resistance at $380, and a trendline of support. Long trades could possibly be made on a pullback to the trendline, or on a break back above $380. Short plays could be considered at the $380 resistance, or on a break of the trendline support.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT