We caught the intraday low within pennies during yesterday’s tutorial session for Hidden Pivot grads. The trade was instantly profitable for those who attempted it, but none of us could have imagined what the weasels who manipulate NFLX for a living had in mind for later in the day. The stock had split 7:1 on Tuesday, presumably because its institutional sponsors believe they’ve milked it for all it’s worth. Understandably, they were eager to unload their holdings on an unsuspecting public. That’s not possible with a $700 stock, since such a price is much too high for mom-and-pop investors. But at $100 per share, the riff-raff could be counted on to clamor for ownership, making it far easier for the smart money to ease out of their enormous positions.
It’s no accident that the stock was split down to a ‘reasonable’ price a day before earnings were due out. DaBoyz used an upbeat report to run the stock 15% in slightly less than ten minutes. This is the sort of activity that passes for business as usual on the world’s bourses nowadays days, but it was always thus; only the technology used to fleece the rubes has changed. We’d be the first to concede that Netflix is doing quite well as a company. But the business of streaming and producing ‘content’ is just a sideline in comparison to the $50 billion capitalization that swirls around Netflix Inc. _______ UPDATE (8:02 p.m. EDT): I tweeted a 121.29 target intraday, provided this lunatic-powered trading vehicle was able to get past a p2 Hidden Pivot at 117.57. This it has done Thursday night, with a wafting short squeeze that should have little problem going the distance. The target is sufficiently clear that anyone fortunate enough to have held a position during this wilding spree should consider taking a profit when it is reached, which seems very likely. _______ UPDATE (July 20, 6:25 p.m.): The pullback from the recent peak at 118.65 may have capped bulls’ spree for the time being. In each of the last four days, the intraday high has been achieved in after-hours trading. Although this attests to the skillfulness of the arse bandits who manipulate the stock for a living, it is not exactly a sign of good health. Either move to the sidelines or trade NFLX with a bearish bias.