In our recent stocks to watch post we highlighted Netflix as one name that had the potential to resume its uptrend and trigger an entry for us. That moment has now arrived. We’ll enter long at Tuesday’s open.
After that post $NFLX shot higher on increased volume, closing above its 20 and 50-day. It’s since consolidated that move, reclaimed its 10-wk MA, and today followed through, again on increased volume, to not only break the descending trendline from the May highs, but also take out the closing high of 6/19.
The last swing low area, the daily and closing lows of $211.09-$207.64, will be our initial stop. That’s about as much room as I like to give, and on these kind of momentum names I think it can be necessary in order to ride the bigger trends, you have to be prepared to give them a wide berth. As longs as that holds the uptrend is intact.
When the stop is 10% away it just means the position size is initially smaller, but if we’re able to move a little higher early on then there’s a good chance we can move our stop as appropriate up towards the $220 level.