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Chart Study: We Sold Netflix on December 15, Before a 62% Decline – Here’s Why

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In this brief educational blog and video, we take a look at our sale in Netflix (NFLX) on December 15, 2021, just over $585, and discuss what led to the sale, and why we have avoided the stock on the way down, to avoid a 62% decline in 4 months. Our subscribers were alerted of this sale in real-time.

YOUTUBE VIDEO: https://youtu.be/QM-Sbt8QMjY

1. After testing a potential breakout on 11/29/21, the stock turned sharply lower on 11/30, after a pivot from Jerome Powell and the FOMC on the pace of their tightening cycle.

2. The stock closed below the 50-day moving average on 12/1, a bearish technical signal.

3. The stock failed just below the 50-day moving average on 12/8, another sign of weakness.

4. I closed the position ahead of the FOMC statement on 12/15, to avoid any further volatility.

5. The stock closed below the 200-day moving average on 1/6/22, another major bearish signal.

6. We have avoided this stock all the way down, as it has been trading below a declining 50-day moving average and below the 200-day moving average.

The total drawdown avoided so far here is 62%.

Our technical process took us out of the stock 4 months ahead of the major Wall Street brokerage firms, which issued 9 downgrades, today, after the major decline.  

See our other top market calls for 2022 here: Top Market Calls 2022 – Blue Chip Daily Trend Report

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