NFLX Watch

The movie rental company Netflix Inc. (NFLX) shows a parabolic sar bull phase on a sharp price rise that continues an uptrend that began in October 2008, and the most recent swing up that began last January.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
NFLX $115.74

At 11:05 a.m. Eastern

The thing not to like about NFLX is that it has gone so far so fast. The price has doubled since the beginning of March. That leaves most traders scratching their heads and saying sagely, "Well, it's already had its move."

The problem is, a trader can use that same line all the way up through a tripling and quadrupling of the price.

It is sometimes said that the markets have no memory. I think the markets do remember price levels, because there are gluts of shares on the table at certain prices whose owners are eager to sell.

However, I don't think markets remember the magnitude of moves. Levels, yes. Percentages up or down, no.

With that philosophical thought ringing in our ears, let's get practical.

The rise has pushed NFLX above 20-day moving average. The price is well above any upside resistance levels: It's blue sky territory above today's high, of $119.50.

Reversal Levels

• $119.50, +3.3% (swing high)
• $115.74 <== You are here.


• $101.43, -12.4% (20-day moving average)


• $90.43, -21.9% (swing low)

Moreover, some analysts think they see a bull flag in the price pattern. I must confess that I don't see it clearly -- advanced market myopia, no doubt -- but if enough people believe that it's there, then the price will behave as though it were. Flags and head-and-shoulder patterns and all of that baggage are essentially Tinkerbell indicators: If enough people believe, it will come true. The only possible flag that I can see would give about 8% potential upon breakout.

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Skynet Panic of May 6 Panic Looks Like This Skynet Panic Poisons Technical Tools Abbreviations: psar - Parabolic Stop and Reverse adx - Average Directional Index pps - Person's Proprietary Signal ma20 - 20-day moving average macd - Moving Average Convergence-Divergence mfi - Money Flow Index sto - Fast Stochastic About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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