Yes we did get this one completely wrong a few hundred dollars ago. Nevertheless we cannot resist the temptation to warn that this stock is vulnerable to a pull-back (to the other side of the channel would bring the stock to $41??). Have we seen this movie before? The p/e is running north of 279X if that helps.

By the way, this looks a little like Boeing in the previous blog, both may be flying high.

Here are the long and short term charts for Netflix. We show a count on the long term chart that suggests a completed , almost, first five wave sequence. We are not wedded to this idea as we may just be looking at only waves one and three complete. i.e. the degree of the waves is smaller.  However whether or not the next leg down is going to be a wave 2 correction of the complete move up, or a wave 4 that just corrects wave 3, the downside targets are  both at least $80.

As it is not perfectly clear where the triangle may have started, we use both measurements to get an idea of how high the stock may peak. We show the two in blue, the bigger one, and pink. the smaller one. $165 and $150 is my best guess. Perhaps it would be advisable to sell at the lower of the two, $150. Either way, if this is correct, the stock could be almost cut in half. With a Beta close to 1.70 and a P/E of 330,  that is entirely within the range of possibilities.

The day after posting my last blog on NFLX arguing that the stock could not go much higher, it went up another $15.50, violating my arguments. We will look at it again in a few days.

We would sell. Not only is this stock rapidly approaching the double top level where it almost always a good idea to sell, the last leg up, either a c wave or a 5th wave is wedging very nicely but something more intriguing has happened. The 3d wave is shorter than the 1st wave and as the 3d wave can never be the shortest, it follows that the 5th wave can not be longer than the third! It is presently just shy of equalling wave 3 and consequently CANNOT go any higher (than roughly $298.93). Why anybody would want to own a stock with a p/e of 347 is beyond me, faith in Bernanke et al does not explain it. A short plain and simple.