Netflix (NFLX) earnings have been launched as we speak, and the information was good . . . apart from one little factor. In addition they suspiciously introduced that, beginning subsequent 12 months, they might now not be reporting subscriber metrics. That is like Normal Motors saying that they are going to now not report what number of vehicles and vans they made. I admit that another side of the report might be a contributing issue for the crash, however let us take a look at the technicals.
After the hole up in January, worth shaped a three-month island that drifted greater, however all was not effectively technically. The falling PMO shaped a unfavorable divergence towards 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-Stability Quantity (OBV) went flat to barely falling. OBV often tracks worth, and when it would not, it ought to appeal to our consideration. On this case it’s suggesting that NFLX is just not attracting ample quantity to justify the rise in worth.
Conclusion: Gaps do not at all times lead to island reversals. For instance, there was a niche up in October, following which a really related island was shaped. Nonetheless, in January worth gapped up from that island as a substitute of reversing. Within the case of the most recent island, OBV despatched up the warning flag.
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Useful DecisionPoint Hyperlinks:
Value Momentum Oscillator (PMO)
Swenlin Buying and selling Oscillators (STO-B and STO-V)
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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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