i want to look at netflix ( nasdaq:nflx );after-hours the company announced earnings and the stock has popped quite a bit, solet's look at how we trade this. first of all, this is not that; you'll notice here when this stockpopped way up last year in
apple stock price tomorrow, response to some pretty stellar earnings, it was an obvious short. if youbought the stock at the open, well, actually you're probably notlistening to this video because it's time for you to begetting on the night shift there
at the circle k. let's look at it on the5-minute chart, it's up at 372.00;you can see it went upright away, so it's trading at372.00 now. let's go back out to the daily chart and look here, okay 372.00, where's resistance for thisstock? there really isn't, i meanthis is so far back it kind of doesn't matter;
instead you want to look at this, if thestock is just going to stay within the bollinger bands, which i suspect, though ican't guarantee that it will, the top is 381.00, so just from a statisticalstandpoint, not from a "gartmanian"standpoint, i would have a hard time thinking thatthis stock is going to get up above the upper bollinger band, becauseit would have just had to span so much distance from bottom to top
that you just have to assume thatprofit-taking is going to come in, and that kind of leads me here. the stock,from the very bottom here at 312.00, now it's up at 372.00, that's a 20 percent increase since april 15th, that's a 20 percent increase. if you were the guy that bought thestock here, or you were just watching the stock,20 percent in such a short period of
time looks pretty good to me. i'll be watching for it tomorrow,certainly it's going to gap up in themorning during regular hours, my suspicion is that ultimately it willprobably sell down a little bit, but i cannot pound the table on this,as far as the selling goes, because i've seen stocks like this, they just gap and run. well okay then dan, tell me whatthe heck i'm supposed to do, make your call, my call is, watch thestinking stock, don't make a call, don't make a prediction;
you can see the stock is trading here,it's not huge volume, two thousand shares traded, great. the stock is trading sideways,what you want to do, and this is "59-minute trader" stuff,watch and see where the stock opens up, wherever it opens up, you know 375.00, although lately the way things havebeen going it will probably open up at 365.00, and this is all short-covering, but wait and see how thestock opens up; that's your reference point. aslong as the stock stays
below that levelover the next half hour or so, you don't want to be long this stock,because it's obvious that the selling pressure is pushing the stock lower. on the otherhand, if the stock instead runs up and thenjust kind of stays above that level, then you want to be long thestock, because you know that what you're dealing with here is a gap and run. the whole idea is this, don't sit here and try to predictwhich way stocks are going to go.
charts, believe it or not, and you canquote me on this, are not predictive, there is no predictive value in just looking at achart. charts are informative, and if, when you look at a chart like this,you're not looking at predictable lines, but instead you are looking at the emotions, theactions, the buying and selling commitment of traders. now all of asudden this starts to make sense to you, and like i said then, if it opens up herethen those folks
that have watched this run are sittingon a pretty nice return, they're going to look to takeprofits. also, those folks that brought down here andhave been in pain, what do you think they're waiting for?they're waiting for the stock to come up and ease their pain, so either way you've got to look at this as ripe trading grounds for selling first thingin the morning. rather than short, you wait and see, wait for the next 5, 10, 15-minutes,
and then which ever way the stock istrading, relative to the opening print, that's the way you want to take thisstock.
