Here’s the updated NFLX daily chart listing the price targets and suggested stop for the recent short trade. I did mention the possibility of NFLX back-filling that gap and so far, the stock has made it over 1/2 way there. I’ve added an extra resistance line at bottom of the 9/12/11 lows (very subtle grey line) and the top of the gap (9/14 lows) is still shown as before, although now colored orange. An ideal stop would be just above that level on a move above 206 or so. As far as my plan on this trade is to give this short some room in both time & price (stop parameters). In fact, I just added a second lot to my position here and will allow a slightly more liberal stop than the 206 level (210 area) to allow for a possible stop-clearing run above the top of the gap. Keep in mind that although this trade is down about 10 points from entry, 10 points on a $200 stock is only about 5%. I have also slightly revised T1 to 135 and T2 will be 106. That gives a 2.75:1 R/R to the first target and a 4.25:1 R/R to the 2nd & final target just based on the initial entry alone and a more favorable R/R if shorting here or scaling into the position as it back-fills the gap.
