NFLX - major reversal on heavy selling

Netflix (NFLX) posted better than expected earnings, and saw a very strong opening in the $390s, yet with very heavy selling, NFLX swung 20% lower, settling -$32 (-9.2%) @ $322. Today's closing candle is one hell of a reversal candle, and offers more downside in the immediate term.


NFLX, daily

NFLX, 5min

Summary

A classic black-fail candle on the open, warned of major trouble..and trouble NFLX most certainly saw. With huge sell side blocks of 500,000 to 1million in size in early morning, NFLX saw one of the most dramatic opening reversals for any stock we've seen this year.


Crazy valuation

With a price of $400, that is a PE of 200, which is simply insane. Even $200 would be PE 100, and that is clearly over-priced on any 'fair value' basis.

The problem for NFLX equity bears, the underlying main market is trending higher, and given a few days.. NFLX will probably get another chance to level out, before making another run to the upside.

Considering the huge reversal and heavy selling, $400 this side of Christmas..looks very difficult to achieve, but certainly not for next spring.