NFLX

Call entry on 2nd 55 candle on Friday 4/19. 233 was sideways showing signs that the 55 was correct in its move up. Best direction on the daily was up. Exit criteria came today when the 55 hit 200 MA. Also, noted that I do not go through earnings under any circumstance and NFLX releases after the close.

I am in NFLX 2 ...$170.00 call.

Bought today because of what I use as a measured gap.

You can see this on the daily. Use last earnings gap from 1/23 to 1/24.

Mark the gap from the close on 1/23 to the bottom of the candle on 1/24 with a red dash line ray. In the center of this gap use the same line ray and mark the center.

Use line segment thickness 2 black and measure with the segment the full gait of the gap. Then using the line segment measure half of the gait of the gap.

Clone the full line segment gap and stack it on top of the top red dash line. Mark the top of this line with a line segment of a different color. I use purple with a thickness of 2. As the stock kept rising I marked half the gap and marked that on top of the purple line. The stock never rose that high. However on 4/05, 4/08, 4/09, 4/18, 4/19 NFLX hit the half gap support. If you change your candles to a line chart you will see a strong support for NFLX which started 1/28. This should match the support from 4/05. Change back to candles and you see that dark purple line hits support as well on 1/30, 1/31, 2/01, 2/04.

Looked for any news on NFLX and found no bad news.



Edited 1 time(s). Last edit at 04/23/2013 07:45AM by Darcy.

Profit....$6, 189.73

Did you go through earnings?

Darcy,

Great trade. I would assume that you went through earnings based on your post and that you considered this more a very calculated gamble. Did you put your typically amount on the line for this trade or was it downscaled to take through earnings?

I would assume that with your experience that even if this trade went against you that it would cause psyche damage.

Again, thanks for sharing and we hope you continue. Was exit based on criteria or HIH? How many $$ were at risk. I assume you made 300+% on this trade.

Darcy that is Awesome, I would have been afraid to go through earnings. Keep up the great work and posts!!!

TCB: I wasn’t afraid of this trade at all. The evidence I had gathered and the charts clearly said it would pop. I knew the talking heads (TV) had bad mouthed NFLX because “they don’t get it” but all the big houses (see below) totally “got it”. I just knew that I knew that I knew it would go up. The chart gap and measured move was just too clear for a pop.

This was one of those things I have been working on, "Darcy's measured move of the gap", from the half gap from 1/23 -1/24 measures the low the stock hit on several days and held. The stock did not do a second measured gap up I fully expected one more measured gap up but instead I got a measure and a half gap up.

BCT.... yes I went through earnings. Yes I know about Gary's Earnings rules in 1-5 but for me this was too sweet to let alone.

CHZTrader...I did not consider it a risk at all. The gaps clearly told me the trade, even through earnings, would be up.

As I pointed out about the Daily chart...the Gap off 1/23 to 1/24 never closed. This was the first GAP and it told me that this stock was on fire when the gap (the window) never closed.

Next the upgrades before earnings from Canter Fitzgerald, Goldman Sacs, Barclays, Capital IQ and the news about Carl Ichan let me be almost 100% sure NFLX would beat. Cantor Fitzgerald reported 4/22 that they expected NFLX to have strong subscriber and rev. growth. You do not get firms like these to make these sort of statements willy-nilly.

I exited because I had a GTC set @ 46.05. I was sold out @ 46.10. I watched it this morning and I could have set my GTC higher but I really don't think I would have been sold out because of how it was moving right at the open.

Cost: I bought 2 contracts for $17.10 = $3,435.02 In my way of looking at it since I use $3,000.00 on most all my trades I really only risked $435.02 more than what I usually risk on all trades.