Netflix (NFLX) earnings had been launched at the moment, and the information was good. . . apart from one little factor. Additionally they suspiciously introduced that, beginning subsequent yr, they might now not be reporting subscriber metrics. That is like Normal Motors saying that they may now not report what number of automobiles and vehicles they made. I admit that another facet of the report could possibly be a contributing issue for the crash, however let’s take a look at the technicals.
After the hole up in January, worth shaped a three-month island that drifted increased, however all was not nicely technically. The falling PMO shaped a adverse divergence in opposition to the rising worth. When the PMO falls above the zero line, it’s telling us that the energy behind the up transfer is diminishing.
Additionally, the On-Steadiness Quantity (OBV) went flat to barely falling. OBV often tracks worth, and when it does not, it ought to appeal to our consideration. On this case, it’s suggesting that NFLX is just not attracting adequate quantity to justify the rise in worth.
Conclusion: Gaps do not at all times lead to island reversals. For instance, there was a spot up in October, following which a really related island was shaped. Nevertheless, in January worth gapped up from that island as a substitute of reversing. Within the case of the newest island, OBV despatched up the warning flag.
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Useful DecisionPoint Hyperlinks:
Worth Momentum Oscillator (PMO)
Swenlin Buying and selling Oscillators (STO-B and STO-V)
Carl Swenlin is a veteran technical analyst who has been actively engaged in market evaluation since 1981. A pioneer within the creation of on-line technical assets, he was president and founding father of DecisionPoint.com, one of many premier market timing and technical evaluation web sites on the internet. DecisionPoint makes a speciality of inventory market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and weblog contributor.
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