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Netflix, Inc.: Large Pull Back Coming

|Includes: Netflix, Inc. (NFLX)

Netflix, Inc. (NASDAQ:NFLX) is fast approaching its 52 week highs at $458. This is what traders refer to as a major double top. A major double top is established when a stock puts in 52 week high and then tumbles over 25%. Netlifx, Inc. tumbled 35% before the recent rebound. Essentially, this means that there are a lot of bagholders that bought at the highs and have been wishing and hoping it comes back to that level so they can sell for a break-even. As Netflix inches closer to the $458 level, these sellers will begin to dump. This will likely cause a retrace back down to the tune of 38.2%, a Fibonacci level. This retrace would take the Netflix, Inc. back to $400.00 and be a great profit opportunity as a short from current levels.

Gareth Soloway