Netflix Likely to Break Free of Compression Range

Netflix (NFLX) shares are likely about to break free of a compression range, giving us an opportunity to trade the breakout.


By Corey Rosenbloom

What levels are important and what are the extended target on the future breakout?  Let’s take a look:

In the Daily Chart above we’re seeing the price compress (range) between a few pivots:

On the upside we have the upper Bollinger Band, 200 day SMA, and 50% Fibonacci Retracement at $106.50.

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For support, we have the rising 20 day EMA (today’s pivot) at $102.00 along with the 61.8% Fibonacci and “Round Number” Reference level at exactly $100.00 per share.

Like the S&P 500(NYSEARCA:SPY), Netflix (NASDAQ:NFLX) trades within a short-term range in April.

Shares are likely getting ready for a breakout one way or another from this range.

An upside “short-squeeze” breakout triggers above $107.00 and opens a buy-pathway toward $112.50.

A downside sell/liquidation path opens under $102.50 and especially $100.00 for a swing back to $95.00.

These are short-term parameters (levels) and trades – we’re just looking for the range expansion beyond these boundaries for the next likely swing (and thus trade).

Keep these levels fresh in your notes and trade the departure (breakout) from the range when it occurs.