Netflix, Inc. (NASDAQ:NFLX) is jumping today. There are rumors about cable companies wanting to join forces. In theory, if these rumors turn out to be correct, it would help attract more viewers to Netflix. While the stock is surging by 6.5% today, the big question looms. Do you buy, short or stay away from Netflix at these current prices.
To get the answer, we must look at the chart. There is tons of hype on the stock right now as it hovers near all time highs. This is a negative for the stock. Next, we have to observe the chart hovering around the 2011 former all time highs. This shows us a struggle for the stock to move much higher in the near term. This is another negative. Combining these factors with the massive extension rally in the markets a fall in the stock is likely. Note that earnings are on October 21st, 2013, after the stock market closes. I expect downside to $270.00.