charts ...

I remember many years ago watching John Murphy on TV doing his technical analysis. Sometimes I found it really interesting - other times it was like looking at tea leaves. But it got me looking at charts and patterns.

Before the fancy graphing capabilities of our PC's and programs I was pretty much stuck with S & P reports and Value Line (up until 95 or so for me anyways). I tended to concentrate on cyclicals. I have for most of my unvesting time been a value player and big on underlying fundamentals. It still drives most of my investment decisions although I don't think I do near the DD now that I did a decade ago when I would study a stock for a long period before committing funds. Computers and the internet have sped up the availablity of info and hence reaction time. (Mostly for the good I think).

I'm starting to ramble again, and so to my point - I have found charts useful for a very long time and although much TA is beyond me, I do find value in basic analysis and I do believe TA can be a predictor to help move the odds into your favor on some stocks. I've never been a stickler on breakdown points like some traders (perhaps many) are. I've managed to survive just fine with patience.

NFLX is a tough one to analyze and call because of the huge short interest. I got "headfaked" more than once here.

clack

Refresh my memory .....

In our long ago discussions did we ever come up with a plausible reason why the short interest in NFLX became so huge? I certainly have never understood it. Now that it has been with us we have had to live with it - hoping for a squeeze and sometimes getting little ones, but dealing with the reality that some people want nothing better for NFLX than to drive the price down as low as they can.

I was reading through some posts on another board and found a very recent message from our old friend SOW indicating that he hasn't been in NFLX for a while, although he continues to watch it. His reason was that the shorts just had too much power over the stock.

clack

<<Its getting awfully close but, chart-wise, I would make a close under 22.50 a downtrend. Anybody else?
>>

Yes, I would read the charts the same way. But I wouldn't pull the trigger if you were already long. Well, that depends on the type of investor you are. I suspect day traders and swing traders would be already bailing on technicals. However, Netflix rode the upper Bollinger bands for a very long time through mid-May. In a matter of a few days it dove (we had an intraday high of 25.93 on May 14 and touched a low of 20.53 on May 19. Roughly a 20% loss and we bounced off the bottom of the Bollinger and recovered. A fall along these lines has happened a number of times since late Feb followed by a rather steep recovery.

I'm still not sure what to make of the strangeness that occured June 13 with that huge dive and fast rebound.


In any event, although I have traded NFLX a number of times, I originally became an investor in the business because I believed in the model and over time I believe management has consistently delivered, even over-delivered, on reasonable expectations. I don't mind holding the stock through downturns. Every single time in the brief history of this stock where I held through the downturns I have been rewarded.

Sometimes I sold off part or all and missed the very fast rebound and would have been better off holding. Trading is an art that I am not an expert at. I've been able to sell at some peaks and buy back cheaper too, so it swings both ways.

Anways, fundamentally I am still a strong long on this stock and short term price movements aren't a bother to me while the business continues to deliver like it has.

enough rambling ...

clack

<< Not much going on. Drifting lower on really low volume.>

You're right. Doesn't leave much to talk about here. Maybe one day the yoohoo board will knock it off with the stupid antics as it should be a good source for new investors to get info.

Fresh faces bring new pespectives and can get everyone thinking when it is done right.

Netflix is a good long term growth stock. I haven't seen anything lately to change that perception. Those who held through past downdrafts have been amply rewarded.

clack

How long was the site down for? When I tried several different times this morning I got in fine.

In the past there have been various outages- most didn't last long - they were also usually late at night when there were very few users. Perhaps one of these lasted a bit longer than planned and affected east coasters? For existing users it is a minor inconvenience - new users might not sign up. I am sure they are aware of this. And so I ask, did the page say it was down for planned maintenance or what? The message it conveys when "closed" is important.

In any event I think today's price action has spoken.

clack

Thanks for putting this up Doug.

Truthfully the signal to noise ratio gets out of hand every so often and then settles down some. It was terrible at times in the early days.

I think it is just a reflection of very nervous shorts. The short interest is huge on NFLX. And the stock is not over valued. The argument for shorts is hard to figure - it can only be on general terms like "This sucker can't keep going up". And if you read TA books you would know that that is not the argument for shorting a stock and often leads to continued losses for shorts.

We're due for another short squeeze on NFLX and I'm looking forward to the post options rebound next week.

Clack
long Netflix