Did You Know NFLX Is In A Range? When Will It Break Out?

This is a WEEKLY chart of NFLX             .

Did you realize that Netflix             was in a range? You may not have if you didn't step back and look at a Weekly (or longer) chart. It is amazing to me how things seem so much clearer when you step back and look at the big picture.

NFLX             has been in this range since late 2013. Since then, when the stock comes down to the $320 area, it turns higher. On the other hand, when it gets up to the $480 area, it turns lower. How can you use this info to invest (or trade) in NFLX? If you want to go long you could buy close to the $320 level. If you want to go short you could do it around the $480 level.

Someday the range will be broken. No one can tell you when that will happen. But it WILL happen. Will there be a hint of it happening? Probably yes. Let's agree that the $400 level is the middle of the range. If NFLX             can stay in the top half of the range (above $400) for a period of time then the chances it breaks above the range get higher & higher. If NFLX             stays in the bottom half of the range (below $400) for a period of time then the chances get greater that it will break below the range.

There are two inner levels of the range that caught my attention. Those are the $380ish and $420ish levels. The $380 level has acted as resistance at times and the $420 level has acted as support at times. Lets say you were long NFLX             from the end of January, when the stock hit $480 you could have sold some of your shares. Why would you have done this? Knowing the $480 level is the top of a range means the stock MAY turn lower in this area. If you did sell up there, you could reinvest that money back into NFLX             around $420. Personally, I don't mind paying the commissions in and out to save $50ish dollars a share...

Maybe you are invested in NFLX             for the long term. Maybe you don't have any desire to sell some at resistance and reinvest at a lower price. That is ok. Let's look at the four lines in the range in a different way. Which levels tend to act as support (levels where the stock turns higher)? The $320 and $420 levels. So if you want to add to your position, you should do it at these levels. They may not be the perfect level every time but there is some history that tells us these levels are good support.

Do you have a "range bound" stock that you bought for your kids and you wish you knew a good time to add to the investment? Do you own a stock in your retirement account that you would like to add to but you are not sure when to do it? This kind of chart analysis can help you with those decisions.

If you want me to draw a chart for you just give me the symbol of a range bound stock. I will post the chart here.

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