Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

Rounded Arcs and Fibonacci Charting for Netflix NFLX

Tue, Feb 5, 1:42 PM ET, by Corey Rosenbloom

Netflix (NFLX) recently attracted trader and investor attention with the recent gap-up and reversal off its 2012 low, so let’s take a moment to view a key Fibonacci pivot level and assess the Rounded Arc Reversal pattern that brought the stock to its current point. As a bonus, let’s look at price levels that may be important in the near future.

First, let’s start with the key price level at work in Netflix (NFLX) stock currently:

After two “Rounded Arc” or Rounded Reversal patterns (the first pattern failed to result in a trend reversal in 2011 but the longer/larger 2012 pattern did precede the current reversal), Netflix broke to new recovery highs not seen since its collapse in September 2011.

In fact, NFLX has recovered roughly 50% of the loss from the $305 peak (July 13, 2011) to the (so far) final inflection low at $53 per share (August 3, 2012).

The current inflection pivot at $180 is where we’ll focus our attention now. Not only is it the 50% Fibonacci Retracement at $178.80 (or “halfway recovery point”), but it’s also the opening price of the sharp downside gap (collapse) that occurred on September 15, 2011 (gap open: $176.73).

Short-term traders should focus on these key level for short-term game-planning tactics:

A breakthrough above the $180 confluence target suggests that NFLX could continue its sharp uptrend toward the “round number” $200 target then $205 to $210 price and Fibonacci Confluence.

A short-term retracement/reversal here suggests that price will challenge the $160 level if not the $150 level for a potential downside objective.

Let’s zoom-in the chart to see the intraday perspective and clearer short-term intraday/swing trading refernce levels:

I drew a short-term Fibonacci reference grid from the low of the gap-up on January 24th, 2013 to the high today on February 5th.

The immediate levels to watch (for possible targets IF price breaks under the current blue horizontal intraday support into $172) would be $168.90 then $163.30 if price breaks under the $169 level.

Note also the rising blue trendline that will soon intersect the $168.90 Fibonacci and price reference level.

Be sure to incorporate the short-term intraday charts with the higher frame Daily Chart levels ($178.80 and $176.63) mentioned above.

Remember, the goal is not to predict, but to react or adapt to real-time breaks of key levels.

For a quick educational reference, let’s look at the broader “Rounded Arc” pattern that developed through 2012:

I’ve written many times about “Rounded Arcs” or “Rounded Reversal” patterns and Netflix (NFLX) gives us another clean example of the concept as it developed the pattern through 2012.

Rounded Reversals/Arcs occur as a result of a gentle (as opposed to violent/spiky) transfer of supply to demand and the pattern shows up on the chart as a visual arc.

The momentum oscillator often shows lengthy positive divergences as price forms the ‘floor’ or lengthy bottom. Notice that Netflix made at least a triple-bottom pattern before reversing, underscoring the point that fighting a trend in motion can be very difficult.

After divergences form, it’s good to note strength in the momentum oscillator (or volume) in terms of spike-highs in the oscillator when price is NOT making corresponding new swing highs – we call these “Kick-off” signals and they are often “signs of strength” for a potential trend reversal yet to come.

The short-term trend reversed when NFLX began making higher price highs and higher price lows and particularly with the confirmation signal on a break above the July 2012 swing high into the $90 per share region.

Trend Reversals in general often take time to develop and it’s best to join with the winning side on confirmation or breakthrough signals as opposed to playing “bottom fisher” and hoping for an eventual reversal.

Note that a smaller similar pattern formed through April to June 2012 but failed quickly as price pushed to carve out its final floor (bottom) over the months of July through October.

To underscore the point – it takes time and effort (and a large-scale shift in the supply/demand relationship) to reverse a trend in motion as Netflix reminded us all through 2012.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey's new book The Complete Trading Course (Wiley Finance) is now available!

blog.afraidtotrade.com


SDI Glossary: "price" Definition
SDI Glossary: "Finance" Definition
SDI Glossary: "Retracement" Definition
SDI Glossary: "Short" Definition
SDI Glossary: "Trend" Definition
This Article's Word Cloud:   Corey   Fibonacci   July   NFLX   Netflix   Note   Reversal   Rounded   September   above   afraidtotrade   bottom   breaks   confirmation   current   demand   divergences   failed   floor   higher   highs   into   intraday   level   levels   making   often   opposed   oscillator   pattern   point   price   recovery   reference   reversal   share   short   shows   signals   strength   swing   term   that   these   through   time   trend   when   will   with

| More

Emini Threatens to Crack Support in Retracement April 28
Fri, Apr 28, 2:11 PM ET, by Corey Rosenbloom

After a surge toward the prior high, we’re seeing a logical pullback toward a key ...

Emini Holding the Support Line for Now April 27
Thu, Apr 27, 12:21 PM ET, by Corey Rosenbloom

After a surge toward the prior high, we’re seeing a logical pullback toward a key ...

The Top Six Surging Stocks in the Dow Right Now
Wed, Apr 26, 12:31 PM ET, by Corey Rosenbloom

With the market itself breaking to new all-time highs, let’s take a look at the ...

An Emini Surge Back to the Highs April 26
Wed, Apr 26, 12:11 PM ET, by Corey Rosenbloom

No upside target is safe from this charging bull market! We’re back at all-time highs. ...

Another Beautiful Parabolic Arc for Bitcoin April 25
Tue, Apr 25, 2:41 PM ET, by Corey Rosenbloom

Perhaps the last time you thought about Bitcoin was when price crashed from $1,200 to ...

Emini Bullishly Breaking Barriers April 25 Update
Tue, Apr 25, 1:41 PM ET, by Corey Rosenbloom

No upside target is safe from this charging bull market! Here’s today’s updated Emini (@ES) ...

Good Google GOOGL Breaks to New 52 Week High
Mon, Apr 24, 12:11 PM ET, by Corey Rosenbloom

The last two times Google (GOOGL) pushed to a new high, price collapsed. Will this ...

Finally a Flag Breakout in Emini April 24
Mon, Apr 24, 11:21 AM ET, by Corey Rosenbloom

Breakout! Price surged through two Fibonacci targets to achieve the prior swing high. What will ...

Crude Oil Tumbles from Negative Divergences April 20
Thu, Apr 20, 3:31 PM ET, by Corey Rosenbloom

Crude Oil plunged toward the $50.00 per barrel level, collapsing from negative divergences into resistance. ...

NVIDIA NVDA Faces Critical Support Test Now
Tue, Apr 18, 12:21 PM ET, by Corey Rosenbloom

Once high-flying stock NVIDIA (NVDA) faces a make-or-break support test or it risks entering a ...

Amazingly We Still Trade Within Our Emini Fibonacci Grid April 18
Tue, Apr 18, 12:11 PM ET, by Corey Rosenbloom

Yesterday saw price rally up away from our 2,329 level toward our key 2,345 level ...

McDonalds MCD Steadily Creeps to New 52 Week High
Mon, Apr 17, 3:21 PM ET, by Corey Rosenbloom

When you think of exciting stocks to trade, you probably don’t think about McDonald’s (MCD). ...

Bouncing Up again from our Fibonacci Grid April 17
Mon, Apr 17, 11:11 AM ET, by Corey Rosenbloom

After a quick rounded reversal took us back to the 50% level, buyers stepped in ...

An Emini Rounded Reversal Back to our Fibonacci Target April 13
Thu, Apr 13, 2:51 PM ET, by Corey Rosenbloom

Taking the form of a Rounded Arc, price broke beneath our short-term Fibonacci Support level ...

Charting the Key Daily EMA Compression Levels in the SP500
Wed, Apr 12, 2:41 PM ET, by Corey Rosenbloom

While we study the intraday levels, let’s not lose sight of where we are on ...

With the Focus on United UAL, Delta DAL May be Ready for a Bounce
Tue, Apr 11, 4:11 PM ET, by Corey Rosenbloom

While we’re watching the stock price of United and the passenger incident, we’re perhaps not ...

A Vicious Bull Trap and Delayed Response to News for United Airlines UAL
Tue, Apr 11, 11:31 AM ET, by Corey Rosenbloom

If you were puzzled as to why United Airlines (UAL) stock didn’t collapse – or ...

Finally a Breakout from our Emini Fib Grid Range April 11
Tue, Apr 11, 11:11 AM ET, by Corey Rosenbloom

Well that’s what we’ve been waiting for!! Price broke beneath our short-term Fibonacci Support level ...

Emini Remains in Thrilling and Exciting Range April 10
Mon, Apr 10, 12:31 PM ET, by Corey Rosenbloom

Reality: It’s NOT a thrilling and exciting range, but that’s where price remains as we ...

Surprisingly Volatile Intermarket Reactions to End the Week
Fri, Apr 7, 3:21 PM ET, by Corey Rosenbloom

This morning’s lower-than-expected Jobs Report didn’t shake up the equity market, but we’re seeing big ...

Range Trading the Jobs Report April 7
Fri, Apr 7, 3:11 PM ET, by Corey Rosenbloom

After a surprisingly lower monthly Jobs Report number, equity prices shrugged it off without a ...

A Pullback and Elegant Intraday Rounded Reversal for AMZN
Thu, Apr 6, 2:11 PM ET, by Corey Rosenbloom

Amazon (AMZN) appeared as the #2 top stock in our compression scan recently and it ...

An Emini Bull Trap Back inside our Fibonacci Grid April 6
Thu, Apr 6, 12:11 PM ET, by Corey Rosenbloom

In reaction to yesterday’s Fed Minutes report, sellers collapsed the market back inside our larger ...

A Surging Breakout April 5 Emini Update
Wed, Apr 5, 11:31 AM ET, by Corey Rosenbloom

Here we go! Bulls are back in control with today’s opening action and Fib Grid ...

A Wider Emini Fib Grid for April 4
Tue, Apr 4, 1:41 PM ET, by Corey Rosenbloom

We’re still using our Fibonacci Grid to assist intraday trading decisions. Let’s take a moment ...

Crude Oil and Stocks Diverge and Drop from the Highs
Mon, Apr 3, 3:21 PM ET, by Corey Rosenbloom

On the Intraday Chart, both Crude Oil and the S&P futures set up a classic ...

All About the Fibs to Start April
Mon, Apr 3, 2:41 PM ET, by Corey Rosenbloom

Can you believe it’s April already? As we start April, we’re still using our Fibonacci ...

Another Day with Same Emini Fibonacci Grid March 31
Fri, Mar 31, 11:51 AM ET, by Corey Rosenbloom

Without any fanfare, the market closes out Q1 2017 within our ongoing Fibonacci Grid. Here’s ...

Still Surfing the Fibs March 30 Emini Update
Thu, Mar 30, 11:51 AM ET, by Corey Rosenbloom

We continue to frame each day’s trading day in terms of our ongoing intraday Fibonacci ...

Finally a Sign of Life for Chipotle CMG
Wed, Mar 29, 12:21 PM ET, by Corey Rosenbloom

Chioptle’s (CMG) stock had a bad run of it after collapsing in 2015. Last year ...

Emini Stalling on a Key Fibonacci Pivot March 29
Wed, Mar 29, 12:11 PM ET, by Corey Rosenbloom

We continue to frame each day’s trading day in terms of our intraday Fibonacci Grid. ...

Surging Through Our Fibonacci Grid Emini Update March 28
Tue, Mar 28, 12:11 PM ET, by Corey Rosenbloom

Today is another victory for our short-term Fibonacci Grid trading plan. Why? Let’s find out! ...

Deere DE Sets up a Rounded Arc Reversal Breakdown
Mon, Mar 27, 3:21 PM ET, by Corey Rosenbloom

The “Rounded Reversal” Pattern takes a while to set-up on the chart but can produce ...

AAOI Surging to Sixty with Two Bull Flags
Mon, Mar 27, 12:41 PM ET, by Corey Rosenbloom

We like to buy pullbacks in strong trends with rising volume and momentum. A stock ...

Final Fib Emini Update March 27
Mon, Mar 27, 11:51 AM ET, by Corey Rosenbloom

The weekend collapse took us straight into our “Final Fibonacci” Target, where we’re seeing a ...

Micron MU and the Persistence of Stable Trends
Fri, Mar 24, 4:11 PM ET, by Corey Rosenbloom

“Trends, once established, have greater odds of continuity than of reversing.” Micron (MU) is a ...

Fibs Fibs Fibs All About the Emini Fibs March 24 Update
Fri, Mar 24, 1:51 PM ET, by Corey Rosenbloom

Our short-term Fibonacci Grid continues to capture the highs and lows of the last couple ...

Join Me Wednesday March 29 for a Live Market Forecasting Panel with Wyckoff Analytics
Thu, Mar 23, 9:11 PM ET, by Corey Rosenbloom

We’re doing it again! I’m honored to be a guest of Roman Bogomazov and his ...

Exciting Emini Bounce Update March 23
Thu, Mar 23, 12:11 PM ET, by Corey Rosenbloom

Often after a crash comes a recovery. That’s what’s happening at the moment in the ...

A Second Divergent Drop for Google GOOGL
Wed, Mar 22, 3:41 PM ET, by Corey Rosenbloom

Google (GOOGL) rallied a second time into a key reversal or “fade” set-up and delivered ...

Quad Market Movement as the Stock Market Crashes March 21
Tue, Mar 21, 2:11 PM ET, by Corey Rosenbloom

This morning we just updated the “Stock market crashing through key target levels” but what’s ...

Disney DIS Slides to New Highs on Divergences March 20
Mon, Mar 20, 2:21 PM ET, by Corey Rosenbloom

Disney (DIS) continues to be a “strong stock getting stronger” which is evidenced by today’s ...

Emini Playing into Critical Fib Support Level Today March 20
Mon, Mar 20, 12:41 PM ET, by Corey Rosenbloom

After yesterday’s Fed Day, stocks surged back toward the prior high, breaking their Fibonacci Grid. ...

Announcing Trader Education Week Next Week
Fri, Mar 17, 6:21 PM ET, by Corey Rosenbloom

Get ready for Trader Education Week! Traders Classroom and Club EWI are opening up March ...

Emini Heading Toward the Highs March 16 Update
Thu, Mar 16, 2:51 PM ET, by Corey Rosenbloom

After yesterday’s Fed Day, stocks surged back toward the prior high, breaking their Fibonacci Grid. ...

Here Goes our Fourth Successful SPX Bull Flag Since November
Wed, Mar 15, 3:11 PM ET, by Corey Rosenbloom

If you’re keeping track, the market is poised to complete its fourth successful Bull Flag ...

Fed Day Fibonacci in the Emini Gameplan March 15
Wed, Mar 15, 1:21 PM ET, by Corey Rosenbloom

It’s the Ides of Mach! And a Fed Day! Do you know where your Fibonacci ...

Emini Bounces Between our Fibs Again March 14
Tue, Mar 14, 11:31 AM ET, by Corey Rosenbloom

We’re still seeing range action between our key short-term Fibonacci Levels in the Emini @ES. ...

A Bad Day for Wearables GoPro and FitBit GPRO FIT
Mon, Mar 13, 3:51 PM ET, by Corey Rosenbloom

Popular wearable Fitbit (FIT) and GoPro (GPRO) both plunged over 4% today, continuing their ongoing ...

Flailing within the Fibs Emini Update March 13
Mon, Mar 13, 1:11 PM ET, by Corey Rosenbloom

After gapping higher Friday, stocks stalled beneath our key short-term Fibonacci Level. We’re seeing price ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

Rounded Arcs and Fibonacci Charting for Netflix NFLX | Self Directed Investor | Copyright © 2008 - 2017, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of serious individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.