One stock that has been on fire is Netflix (NFLX). But that came to a screech this past week as the famed activist and investor Carl Icahn sold his stake in the company. And a selloff ensued… This week’s selloff also comes on the heals of a huge run-up in the stock’s price and a 7 for 1 stock split announcement. Could a NFLX stock top be in the works?
My 3 beautiful daughters watch Netflix ALL THE TIME so I know it’s a great service/company. But often times stock prices can get ahead of themselves. Honestly, I had not taken a look at Netflix but had blogged about it last year.
But the recent events spiked my curiosity, so I decided to look at what the price patterns were saying.
NFLX hit and held its .382 Fibonacci retracement level at $303 nicely and then ROCKETED HIGHER. That move reminded me when we tried to short Google (GOOG) some time ago. Ouch. Netflix held this level for months and then gapped like the Grand Canyon.
But its big move higher means it’s time to look at NFLX chart again. Here are two takeaways:
1) Carl Icahn is out and that has to mean something
2) I think he’s a pattern recognition trader. As shown below we have a 2.618 fibonacci extension as well as an AB+CD pattern on a parabolic run.
For these reasons, I am feeling very cautious about NFLX stock moving forward. Is a NFLX stock top forming? Only time will tell.
Netflix Stock Chart (NFLX)
Thanks for reading.
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.