NFLX (Netflix Inc.) will trigger a short entry on a break below 372.75 which is price support just below this 60-minute bearish rising wedge pattern.
NFLX 60-min Oct 2nd
It appears to me that the counter-trend rally that I was expecting when I closed out the last official short trade on NFLX back on July 31st has most likely run its course. In fact, at the time of closing that trade out back then, I had posted the following 60-minute chart stating that I may look to re-short the stock on a bounce back to one of two levels, the upper-most being the 384.87 resistance level that was just hit yesterday & again earlier today (I also posted this setup as an unofficial trade in the trading room yesterday).
NFLX 60-min July 31st
Should this setup trigger a short entry soon, it will come right around where we shorted on that previous trade NFLX back on July 17th with a very timely & patient entry following the initial dip-buying rip that immediately followed a big earnings-induced gap down. That short entry proved to be right around the highs following the sharp 12% snap-back rally that faded most of the large opening gap lower, with the stock immediately & steadily falling from there.
The bottom of that same gap is still resistance, hence part of the reasoning for posting NFLX as an objective entry there in the trading room yesterday. On a related note, Netflix is once again scheduled to report earnings after the market close on Oct 16th. As this stock has a history of very large opening gaps in the wake of its quarterly earnings reports, those that are not comfortable holding this stock into earnings might consider passing on this setup if it triggers before Oct 17th or closing out the trade before then, even if the first price target has not been reached.
The maximum suggested stop for this trade, if targeting T3, is any move above 415.70 while those targeting T1 or T2 might consider a using a stop with an R/R 3:1 or better based on your preferred price target(s). The suggested beta-adjusted position size is 0.85.