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NETFLIX (NFLX) — Distribution nears completion?
NETFLIX (NFLX) had a climatic run up in July 2020 created a buying climax [1] high near 575 with spike of the supply followed by an automatic reaction, which sets the support level at 467. The increasing of the supply from the buying climax high to the down swing formed by the automatic reaction stopped the up move and a trading range was formed.
Gap down with huge supply reacting the earning created a supply zone (highlighted in red) [2]. Subsequent decreasing of supply [3] together with the volatility till Aug 2020 cause a rally to test the resistance created by the buying climax high.
Big bullish bar with spike of volume (with increasing supply) failed to touch the high at 575, suggested selling into strength [4]. Subsequent down swing tested the support with increasing supply. The next rally up only created an up thrust (false breakout) of the previous swing high at 557 with poor demand.
After the false breakout, NFLX gap down with huge supply [6]. Another attempt to rally with increasing volume but failed right at the next bar could suggest last point of supply (LPSY)before marking down to complete the distribution structure [7].
Notice that the supply zone at [2], [4], [6] & [7] as highlighted in red posted as strong resistance zone. To violate the bearish scenario, NFLX needs to…
