Well, now I'm wondering if yesterday's mistake (see update 5) was actually a "Freudian Slip", my subconscious asserting itself by erroneously entering an order that got me out of a bearish position. What I'm trying to say is NFLX turned around and made a bullish signal.
The most recent 3 candles, including today's, makes a Morning Star pattern with a candle close over the 8ema. We also closed a gap shown on the chart and bounced off the 200sma. These are all bullish. The stochastics are higher than I'm comfortable with but they did drop below the 80% overbought level.
The odds now are that price will continue to increase. If that's what happens, there are 3 common ways it can play out.
1) After going higher, price turns over again and heads down before reaching the recent swing high at 338.
2) Price rises to the previous swing high and then turns over and heads lower, forming a double top pattern.
3) Price surpasses the recent swing high and continues.
The second scenario merits some weight because there is a 161.8% Fibonacci level there. Its from the green range 281.12 - 316.83.
I can't say which of these is most likely but the current configuration is bullish enough where its probably worth going long but in a very cautious way. I wouldn't set it and forget it, but taking a small bullish position and maybe adding more when there's confirmation seems like a reasonable course of action.
A target would be the yellow 161.8% Fib extension at 343.93 if we make it past the recent swing high and green 161.8% Fib around 338-339. This also coincides with the AB=CD projection.
This morning's market activity was pretty dynamic with good volume, compared to what's been normal the past several weeks. Hope the markets continue to give us short term traders good volume and volatility.
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