I'm not an expert in shorting and I wouldn't short leaders... but if one were inclined to, I might suggest focusing on a name that is already showing signs of distribution.
BIDU is, I think, much closer to potentially being an excellent short.
For educational purposes, here's a chart with some notes. You can also see GOOG for a good example of a leader name that has indeed broken down.
Even BIDU still needs to break its 50 day MA but once it does -- I think this could drop a good 10 points before finding any kind of bounce.
Everything is about Street support. BIDU already lost the 20 day MA.
Then again - NFLX posted a bearish engulfing candle in Aug. and late Sept. The next 8 days were weak. So yes, assuming NFLX gaps down tomorrow - you might be able to catch a wave for a week or two.
What makes NFLX so dangerous is, you can see when it does finally pop, it can often gap up ABOVE the previous high which can erase 7 or 8 days profits overnight.
Are you thinking of trading the weekly puts? (I would.)
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.