Here’s my take on Netflix (NFLX). (Hint: Buy it) (October 08, 2015)

Free Chart


I want to look at Netflix ( NASDAQ:NFLX ) today. Really interesting price action in this, I think this is a buy. Frankly somebody asked me about it this morning in the forum, “Do you have a position? And I said, “Not even interested,” because it had been printing this lower high and then moving lower. Typically when a stock is, essentially, in this configuration where it broke down beneath the 50 (you’ll see a lot of stocks that have been like this), have broken down below the 50-day moving average and then come back to them. They kind of stall for a while and you really don’t know, if you’re strictly looking at technicals, you really don’t know, unless you’re a fan, then you know for sure. At least you think you do.

You really don’t know if the stocks going to move higher because this is just the “pause that refreshes” right at the 50; or if this is just a lower high and then ultimately the stock moves lower. You really don’t know how that’s going to happen. Look at the move that Netflix ( NASDAQ:NFLX ) has made in 2015, it had a heck of a move already. So you truly don’t know which way it’s going to move, particularly in this kind of “hinky” market; I’m well aware of that, I follow this stock, but look at the intraday move. So what happens? Well, it turns out Netflix ( NASDAQ:NFLX ) has decided they’re going to raise their prices, so the stock pulls back and nobody knows why.

You remember Reed Hastings, I forget exactly what it was, but the guy decides he’s going to hike prices and then at the same time split off the DVD delivery from the online service. The stock just absolutely tanked and the guy ultimately even came out and said, “Sorry, I screwed up.” Wouldn’t it be nice if every CEO that screwed up actually came out and said, “Sorry, I screwed up?” But anyway, the stock trades down. Suddenly I think traders are saying, “Well wait a minute, that’s a good thing. Everybody likes Netflix.” This isn’t the same culture. It’s not the same country. It’s not the same industry that it was the last time he “screwed up”.

I don’t know about you but I watch Netflix a lot. I cant’ even watch regular TV anymore. It stinks! So the bottom line is, we are kind of a culture of “Netflixians”. And so I’m looking at this stock, I wish I’d kept looking, and I’ll be honest with you, I wish I’d bought it, but I didn’t. However, you can. Because you look here, this is, again, the 5-minute chart. Intraday this stock has just continued to move higher and it closed at the high of the day. So the only reason that the stock stopped going up was because the market closed.

So I’m looking at this and I think, if this line is any indication… yes, it’s traded higher after hours. The bottom line is this, Netflix ( NASDAQ:NFLX ) was in a squeeze, it’s popped out of that squeeze, it screamed higher on volume. This is now a blow-off top, this is just getting going. I think it’s a buy right now. I wish I’d bought it earlier today. I’d like to tell you that I did, but I’d be lying. But I’ll tell you this, I’ll be buying it tomorrow and I think you can too.