Netflix Does “The Slinky”

• Posted by kid dynamite
• on October 25th, 2011

The Slinky is NOT a chart pattern you want to see: when your stock looks like a slinky going down a flight of stairs.  Exhibit A: $NFLX:

Now, you may be tempted to look at that chart, crank up your inner “mean reversion” instinct, and say “Wow – CHEAP! look how much it’s down!”  Indeed – NFLX is well off its highs.  From $300 to $75 – that’s a 75% off sale!  So lets go to the two year chart for some more perspective:

Remember “You’ve come a long way baby?”  It always depends on your perspective!

-KD

disclosure: I have no position in $NFLX.  My trader’s instinct is that if you’re buying the stock here, it has to be for a quick trade, as it looks like it will go lower before it goes higher long term.   Then again, you could have used my July 7th post on NFLX’s strong upward momentum as a perfect contrary indicator to time NFLX’s top almost TO THE DAY.  Which is why I don’t give trading advice.

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