Friday, December 3, 2010

Netflix (NFLX) Falls Dramatically Past 3 Sessions; in Related Note - Hell Freezes Over

This is an example of why it is hard to chase stocks that are so far away from even the short duration moving average (i.e. 10 day or 20 day).  It works, until it doesn't work - and then usually the reversal is quick and dirty.   If you chase a chart this extended, you really need to have some tight stops in place as a long. Neflix (NFLX) has two yawning gaps in its chart in the mid $150s and mid $170s.  It will be interesting to see if the buyers rush in at the 20 day moving average under $184 to pick up this 'bargain'.

When I looked at the chart a few days ago, the stock was up 100% from August and 250% year to date.  Despite the recent pullback, still one of the stocks of the year.  I sold the last of mine some $17 points lower than it is now, back in September!

No position


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