On the 4 hour chart, Netflix is in a ascending triangle and a violent breakout seems imminent as the volume has tapered off significantly as the triangle consolidates. Technically, an ascending triangle will breakout with the prevailing trend which in this case is still upward, however the MACD is showing a massive bearish divergence (blue arrows) across 3 relative highs (green arrows) on the price chart. Watch for a breakout in either direction in the upcoming weeks and increased volume to confirm the breakout. Targets are based on the height of the ascending triangle. This is for educational purposes and does not constitute trading or financial advice. Thanks and good luck!
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Netflix is painting an ATH at the moment and piercing through the roof of the ascending triangle. (343.12 at the time of writing). However, volume is starting to taper off so we'll see if that continues or if it will start to pick up again. I am a weary of this breakout because of the bearish divergence described in my initial post. Let's wait to see if Netflix can close above the previous ATH (338.82) in today and tomorrow's session or if we have a false breakout and the rug will be pulled out beneath us. Ideally, a daily close above the previous ATH and a re-test of the ATH to confirm it as support will give us the confirmation needed to go long and enjoy the ride.
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I wouldn't FOMO jump in here on a long quite yet. Something seems fishy as there is another bearish divergence forming on the new ATH and on the MACD on the 4 hour chart. I would wait for a pull back first and ideally a confirmation that the top of the ascending triangle now serves as support. If you are already long, it would be a good idea to have a stop loss set up just below the previous ATH at 339ish.
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update here
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I never entered this trade unfortunately. I was waiting for a retest of the top of the ascending triangle but that never occurred. A conservative approach would be to wait for the re-test of the breakout point as confirmation, however as you can see here, sometimes that never happens. In hindsight, I should have entered the trade upon the breakout and set a reasonable stop loss just below the breakout point. Live and learn! Oh well!
