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NFLX Short-Term Buy; Long-Term Sell

|Includes: Netflix, Inc. (NFLX)

Chart of the Week

POSTED: July 7, 2012

PUBLISHED IN: Home Callout Right

COMMENTS: 0

NFLX has finally reversed LONG after it's early March, 2012 SHORT signal @ 108. The Sell trade generated a 30% gain in the four months it was in effect. Option traders could have easily made triple digit returns.

Now we are on a LONG in the Daily Trend Model:

NFLX Daily Trend Model

The NFLX Weekly Trend Model, the longer term trading model, remains on it's SHORT signal of August, 2011 @ 207. Longer-term traders are up about 65% on this trade:

NFLX Weekly Trend Model

With the Daily and Weekly models now at odds, taking this new Daily Long is problematic. There was one other Daily LONG signal since the Weekly SHORT has been in effect. As you can see on the Daily chart, the NFLX Daily Trend Model went LONG in early January @ 80 and ran all the way to 107 before turning back down in sync with the Weekly model.

While there are nice profits to be made shorter term going against the weekly long term trends, the real money will be made when NFLX turns down again and both models will be SHORT.