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Netflix: How to Play Rallies in Momentum Stocks
A downside target for Netflix is $250.
Tim Thielen    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

There's a strong rally going on today in the previously beaten up momentum stock names. It actually started yesterday, and it is seeing some follow through today. My take is that this is a bear market bounce in many of these names and that, at this point, it is an opportunity to short the stocks after a rally (with a certain number of those names being more bullish exceptions).

Take Netflix (NASDAQ:NFLX), for example. The stock appears to me to be in the midst of a breakdown out of a Head & Shoulders topping formation with an ultimate downside target in the $250 range. Today's rally appears to me to be the "c" leg of a short-term "abc" upside correction within that overall bearish chart. I'd be fading this rally in anticipation of a continued move down to the projected downside target range. I would, however, use $340.19 (the 50% retrace of the April 22 to April 28 sell-off) as a backstop for any shorts.

Netflix Head & Shoulders Chart:

http://image.minyanville.com/assets/buzzbanter/charts/original/050114/Tim_Chart_1_1398956646.jpg
Click to enlarge

Bearish Netflix Chart

http://image.minyanville.com/assets/buzzbanter/charts/original/050114/Tim_Chart_2_1398956657.jpg
Click to enlarge

Twitter: @seachangereport

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Netflix: How to Play Rallies in Momentum Stocks
A downside target for Netflix is $250.
Tim Thielen    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

There's a strong rally going on today in the previously beaten up momentum stock names. It actually started yesterday, and it is seeing some follow through today. My take is that this is a bear market bounce in many of these names and that, at this point, it is an opportunity to short the stocks after a rally (with a certain number of those names being more bullish exceptions).

Take Netflix (NASDAQ:NFLX), for example. The stock appears to me to be in the midst of a breakdown out of a Head & Shoulders topping formation with an ultimate downside target in the $250 range. Today's rally appears to me to be the "c" leg of a short-term "abc" upside correction within that overall bearish chart. I'd be fading this rally in anticipation of a continued move down to the projected downside target range. I would, however, use $340.19 (the 50% retrace of the April 22 to April 28 sell-off) as a backstop for any shorts.

Netflix Head & Shoulders Chart:

http://image.minyanville.com/assets/buzzbanter/charts/original/050114/Tim_Chart_1_1398956646.jpg
Click to enlarge

Bearish Netflix Chart

http://image.minyanville.com/assets/buzzbanter/charts/original/050114/Tim_Chart_2_1398956657.jpg
Click to enlarge

Twitter: @seachangereport

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Daily Recap
Netflix: How to Play Rallies in Momentum Stocks
A downside target for Netflix is $250.
Tim Thielen    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

There's a strong rally going on today in the previously beaten up momentum stock names. It actually started yesterday, and it is seeing some follow through today. My take is that this is a bear market bounce in many of these names and that, at this point, it is an opportunity to short the stocks after a rally (with a certain number of those names being more bullish exceptions).

Take Netflix (NASDAQ:NFLX), for example. The stock appears to me to be in the midst of a breakdown out of a Head & Shoulders topping formation with an ultimate downside target in the $250 range. Today's rally appears to me to be the "c" leg of a short-term "abc" upside correction within that overall bearish chart. I'd be fading this rally in anticipation of a continued move down to the projected downside target range. I would, however, use $340.19 (the 50% retrace of the April 22 to April 28 sell-off) as a backstop for any shorts.

Netflix Head & Shoulders Chart:

http://image.minyanville.com/assets/buzzbanter/charts/original/050114/Tim_Chart_1_1398956646.jpg
Click to enlarge

Bearish Netflix Chart

http://image.minyanville.com/assets/buzzbanter/charts/original/050114/Tim_Chart_2_1398956657.jpg
Click to enlarge

Twitter: @seachangereport

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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