Netflix (NFLX) : Kumo resistance

Having break kumo support couple of days back on July 28, NFLX is now making an attempt to turn the trend around.

Part of this rally is made by calls from Morgan Stanley and Piper Jaffray that NFLX will hit a target price of $140.

On my part, I will admit that I do not know what are the fundamentals of NFLX.

My reading of the Ichimoku chart for NFLX is still bearish.


Netflix (NFLX) : Testing kumo support

As I am typing this now, Netflix is now testing the lows at around 101.75 on the 5min chart.

A break below this level will definitely see NFLX breaking the kumo support on the Daily Chart.

Already at this level, it is below the support level identified by the Chikou Span at 102.70 on the Daily Chart.

Should it break the kumo, my target is around 93 to 94 as seen on the Weekly Chart.

Having said that, from the Weekly Chart, we can see that NFLX is still way above the uptrend. In my opinion, this is a very good case study of Netflix being the right industry and business. Generally, the younger generation will grow up with streaming services and digital download. And Netflix business model does reflects that.

The downside for Netflix is its ability to go beyond the shores of US. Are there growth outside of US?

Which markets will it be? Fragmentation of markets is its biggest challenge, followed by the ability to work with media companies on territorial rights for the content.

My bias is for Netflix to drift further down. Let’s see how far it will go.


Palm Inc. (PALM) : Bullish Tekan sen – Kijun sen cross

Palm has a nice little rally last Friday; from 11.02 to around 12.50

The end of day chart shows a bullish Tenkan sen – Kijun sen cross just below the kumo.

This suggest that there may be resistance ahead (possibly at $12.60).

At the same time, this rally brings back memories of PALM at 1 year ago (when Pre was launched). Palm went from $6 to around $9 within a month.

What to look out for:

– more  distribution deals with carriers outside of US

– ‘killer-apps’ for webOS

– further out, webOS in other form factor (other forms of devices apart from cellphones)

– possible deals with media companies