NFLX 340 PUT - trade idea, risk capped
This idea is based on 3 timeframes. The 2 green lines show overhead resistance on weekly chart since Jan. 2018 and strong support/resistance line around 336. The stock could move back up to 360ish before going down, so I have a stop loss in place. The yellow lines show a channel on the daily chart, and I am looking for price to move back down to lower line. You will also see a completed "cup". If you pull up a 30min chart you will see a strong support/resistance line around 343.30, and price is testing this line.
On the daily chart, between 12/20 and 1/24, there was a higher high and a higher low, while RSI and stochastic show a lower high and lower low (divergence).
Options on NFLX are expensive and theta decay will ruin a good trade, so I opened a very small position of weekly 340 put at $4.62. I will hold it overnight for a target around $330, the lower end of the daily channel. I will exit the trade if price goes over $345.70, which is recent high on 30min chart.
On the daily chart, between 12/20 and 1/24, there was a higher high and a higher low, while RSI and stochastic show a lower high and lower low (divergence).
Options on NFLX are expensive and theta decay will ruin a good trade, so I opened a very small position of weekly 340 put at $4.62. I will hold it overnight for a target around $330, the lower end of the daily channel. I will exit the trade if price goes over $345.70, which is recent high on 30min chart.
Trade active
I thought stocks could open higher today but I am trading my chart. See 30min chart and see stock opened at 20sma. Will check next 3-4 30min candles to decide if I close position or hold.Trade active
Puts have lost value due to theta. I could have added more this morning but do not want to risk more principal.So far NFLX has sold off and is testing that 343 line again.
Trade active
NFLX broke below 343 support line on 30m chart. Adding puts to position.Trade active
Study the 30m chart with candles and a support line at 343.30. After breaking below the line, this stock bounced up to close over 343.30, and in the final 30min of trading it dipped back below. Daily close was just under at 343.16, and candle is bearish engulfing.Trade active
This morning after touching 348 and going back below 343.30 line, I added more puts and will look for stock to come down to daily 20sma. On 30m chart, 20sma has been in cloud, and this usually causes price to bounce around. A trade below yesterday's low sees more downside, but now my exit plan has to focus on reducing loss instead of maximizing profit.Trade closed manually
I exited this trade on 1/30 for a loss. Price action and indicators no longer supported my trade idea and I did not want to lose more by holding overnight.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.