Wednesday, 21 March 2012

NFLX: on my doorstep

For the first time, I've been directly subjected to NFLX. Their first bit of advertising arrived on my doorstep today. NFLX is conducting a massive advertising/awareness campaign across the UK, and I'd guess much of Europe too.

NFLX, 2yr, daily

We have a very clear bull flag, which has been confirmed in the last few days, the MACD cycle is now positive again, and NFLX looks set for a challenge to the 200 day MA at 140/150 within the next few weeks.

I suppose we could label the bounce off the floor as an ABC corrective wave - maxing out around 150..before a move much lower to break the previous low.

Earnings season will be vital for NFLX. Can it start to increase profit margins? If yes, then $200 in the summer is easily viable (we all know the momo traders WANT to love this thing again). If NFLX fails to show good growth prospects..with further concerns over 'can it make any money?', then we're likely to see a steep fall.

Certainly, its one to watch, if only for entertainment purposes.