NFLX – the Widowmaker

Talk about a battleground stock.  Well, I guess NFLX hasn’t really been much of a battleground lately, as the shorts got their heads caved in after Thursday’s 16% gap higher on earnings.  Today’s late action looks to me like basic market psychology in action.  (Click for chart) The stock was right at it’s all-time high at the $210 level and as soon as it took out that barrier, late in the afternoon in an absolute massacre of a general market tape, there was a march higher for the final two hours, as shorts gave up.  I can almost see the shorts and longs sitting across from each other at a table, seeing who will blink first in the battle of “do you want to hold this position over the weekend?”  It wasn’t much of a fight, of course, as you can see from the chart.  Nice little straight line up from 2pm to 4pm, closing at nearly $218.

I have no position in NFLX.  I think the stock is expensive, and I think it’s going higher before it goes lower. I just found the price action over the last few days to be pretty interesting and telling from a psychological point of view.
-KD

ps – If anyone has a good, simple way for me to scrape the intraday chart and embed it here, don’t hesitate to share it.  EDIT:  thanks to GYC for suggesting Freestockcharts.com

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