NFLX Earnings Play for a Day Trade ! Earnings Below Expectations

$NFLX had a negative earnings yesterday Wednesday after hours. Big gap down to below all major moving averages 20/50/100/200. If you look at the Daily Chart on the left you will see that its currently around $324 premarket (Thursday) which is mid way between the $333 pivot as resistance and $311 pivot as support, the 15 Min Chart on the right shows this. Intraday its currently making higher lows but finding resistance around $325. I would go short if it gets/stays below VWAP and doesn't get above the 325 intraday resistance. Up until the writing of this post its having trouble breaking above the $325 resistance which is a sign of weakness (bearish). Since $NFLX has an earnings catalyst it has a higher probability of being a good trade compared to not having a catalyst which makes it mimic the market ($SPY). Having said that its better to have the $SPY in alignment when trading $NFLX. Its a better short trade than a long one. If it gets above $325 and stays above VWAP then it has room to go up until $333 resistance but that would be a lower probability trade than going short on it as the Daily Chart and the gap fade shows more weakness than strength. To make matters even more complicated, there is a good chance that buyers (bulls) would scoop this opportunity and buy $NFLX at the low price when the market opens today (Thursday) driving the stock up. The $SPY would play an important role in determining the direction of the market.

Comment:

I took $NFLX short after it hit resistance and started coming down, once it got below the 20 ema i was short 323.44 I got out all my position at 320.54 which was premarket support at exactly this spot it started reversing !!!