She’s Still Guilty in My Book

Rallies in the likes of Netflix have served the purpose of punishing latecomer/undisciplined shorts in the growth leaders in recent days and even weeks. Netflix, to be fair, has notably outperformed other leaders like Facebook in May.

Still, even in Netflix these rallies are guilty until proven innocent. Mind you, you can play them (see my FEYE long trade earlier this week). But you had better keep your mind in order when it comes to how to view the stock, overall.

Put another way, Netflix remains in grave danger of a major, long-term top. Even if not a major top, though, the declining 50-day moving average (dark blue line, below) downsloping and renders the recent rally, despite price clearing the 50-day, to be suspect. Bulls would need to put in a higher low now and see that 50-day turn back up to start the healing process more convincingly.

Much like way I view Casey Anthony, as still being guilty (thanks to the the way prosecutors in Florida botched her case, overcharging her and seeking the death penalty due to political pressures), Netflix and the other growth leaders are still very much suspect.

___________________________________________________________________