Hello Traders,
NETFLIX!!!
Have you been following this?
The stock has been on an incredible run - 183% since December!
At some point it will become overbought, has it run its course? Earnings are coming up, and volatility has crept higher.
The point is, while doing yoga this morning, I missed my entry. Even with a strong rebound in the stock market, this stock finished down, BIG. A little scary to get in before earnings and with an increase in volatility, but today's move may have been enough.
THE REAL REASON TO ENTER - DOUBLE BOTTOM. The double bottom was satisfied. 18 to 33 and then 33 to 51 - perfect double bottom. And perfectly satisfied, which means overbought!!
Let's see - risk of the stock going above short term resistance - small. Reward of it dropping into mid 40's - big. Stock drops 6% and the ATM put (one month 0ut) moves 45%.
Not a bad day, swing, intermediate trade!
Happy Trading
Trader B
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