Netflix topped on Friday 20 cents above our 398.66 target, leaping $11 from an opening-bar deficit of $4 even as the Dow struggled for traction, down nearly 200 points. This was quite a performance by NFLX, one that made it relatively easy for subscribers who bought call options on the opening as I’d advised to make a few bucks. The stock sold off moderately, ending the day at the midway point of its intraday range. To judge from the chart, there is a strong likelihood that bulls will achieve the 426.82 target (see inset). However, this could mark an important top, since the pattern is so clear and compelling. That always raises the odds that a Hidden Pivot target will be hit precisely. Meanwhile, although I doubt NFLX can continue to swim against the tide if the broad averages are weak, we can count on it for a high-beta performance in any event. Indeed, the pitch of its rally has been even steeper than AMZN’s.______ UPDATE (June 18, 9:04 p.m.): No one reported taking a position in NFLX, so I’m not offering a tracking position. However, since the recent top occurred a hair from where we’d expected it, we shouldn’t be surprised if the stock continues to fall. Here’s your road map for the next leg down. A decisive breach of p=387.41 would spell more downside to at least 381.65. Also, a rally back up to the green line following a low near 386.00 would set up an enticing ‘mechanical’ short.______UPDATE (June 19, 7:15 p.m.): I’m not a Reed Hastings-worshiper, and I think Netflix — the stock and the company — is much overrated. But that doesn’t mean I will ignore clear evidence on the chart that the shares are headed still higher. In that regard, the stall today exactly at p=404.93 provides some very useful information. It has confirmed the bullish pattern itself and its target, and we can expect an upthrust to exactly D=423.36 if and when p has been exceeded decisively. Specifically, we should stipulate that NFLX trade 408.00 or higher intraday, or close for two consecutive days above p. Pivoteers, please note: A pullback to the green line from around 409-410 would generate an enticing ‘mechanical’ buy signal.
