NFLX soared Wednesday – in what appears to be the start of another leg higher – propelled by the heaviest daily volume it has registered in 3 weeks. While this impulsive price action (building upon an unabashedly bullish technical chart profile) suggests that a new all-time high is likely within NFLX' house of cards -- an initial upside target of 177.
50 would fill an open gap left by the 8/8 low.The selloff that began with 7/21' swing high ran its course on 8/21, when NFLX registered a swing low of 164.23. That inflection point marked the conclusion of a swing high to swing low counter-trend pullback that ran for exactly one calendar month. In practical technical parlance, NFLX was simply taking a breather to digest rapid price gains before embarking upon its next leg higher.
NFLX found support on 8/21 just above the 163.55 level, which also coincided with the yuge gap created by its 7/17 - 7/18 short-sharting earnings release. After filling that gap to within half a percent (0.41% ~ this belt hold confirmed the breakaway), a daily doji candlestick pattern marked the inflection point where buying pressure began to exceed selling pressure.
Bullish Candlestick Patterns
On 8/28 NFLX plotted a bullish harami daily candlestick pattern – this is noteworthy because haramis best resolve themselves (i.e. 'work better') when they register after periods of sideways price movement.
Though the following session opened with a gap down, NFLX quickly plotted a failed new low (FNL) at 164.73 and rallied into the close – registering a picture-perfect bullish engulfing daily candlestick pattern (picture-perfect because the previous bar that it engulfed was a bullish harami).
These two candlestick patterns paired together – a bullish engulfing pattern that directly follows a bullish harami candle – often serve to significantly boost the accuracy and strength of the original candlestick signal. In this case, the daily bullish harami.
This is precisely what occurred on 8/30, as NFLX rallied into the close – bumping up against the underside of 175 and closing the TD (trading day/ session) by plotting a daily bullish marubozu candlestick pattern. The daily bullish marubozu pattern – whereby an issue opens near its absolute price low and closes near its absolute price high – is indicative of heavy, persistent and sustained buying pressure.
Where to Next?
[1] An open gap at 177.50 remains unfilled;
[2] That open gap at 177.50 coincides with NFLX' next area of upside resistance, spanning 178-182; and, from there
[3] Stranger (~193 - 197) things (~204 - 207) = yet moar all-time highs are likely in NFLX' house of cards.
Inter-FAANG Price Action
Finally, let's quickly examine inter-FAANG price action.
Why?
Because someone has to take over the reins of FAANG leadership, as:
- Facenook (FB) coils and bull flags sideways without giving a Zuck for another few days – ostensibly biding time to digest gains before winding yet closer to Skynet higher;
- Amazon (AMZN) marks time sideways-up before another leg lower (up c. 3.5% from recent swing lows, watch for marked relative underperformance as a fair tell for);
- snAAPLe (and Mister Softee | MSFT) continue to slow crawl stair-step higher to new all-time highs; and,
- GOOG spins sideways-up, attempting to stave off the development of serious technical damage … were it to Do Evil and break bad below the ever-distinct 8/21 swing low closing print of 906.66
It simply seems ...
as utterly non-sensical as the price-weighted 19th century joke that is the DJIA' Dow Divisor methodology
... NFLX' turn to grab the baton of FAANG price action and, akin to TSLA, hypomanically death march those short it through a veritable jungle of deleterious PnL and despair.
