NETFLIX: Short Sell

Chris Mac said:
Yes, I understand what you are saying. I wrote 3 months ago Netflix was a BUY. +40% since then. I think I know what is a good call, right? Brazil Stocks : BUY 8 months ago. +70% since then. Short Biotech sector last year. -40%. Short Valeant this year. -20%. Etc etc. Reread my older posts if you don't believe me. This is called surfing with the trend. And now my call : short DB until at least 11, then 10 if 11 doesn't hold and heavy shorts below 10.

CM
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Oops!

http://www.investopedia.com/news/deutsche-bank-shocks-strong-profits-db/?partner=YahooSA
 
Chris Mac said:
I know I know, and you will see : this is a bull trap. Insiders bought the stock before earnings report because they already get the numbers. But now?
Buy the rumor sell the news. You got the news, guess what will happen ?
Definitly I prefer being short DB than Netflix :)

CM
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Perhaps, however it reinforces the validity of the trade I made a few weeks ago: an intentionally short term trade where I was playing the bounce. Yes, I got in a little late, and exited a little early, but I achieved my goal and followed my own rules. You obviously don't like trades like this, and that's ok. Each person has their own approach and style.
 
SimpleTrades said:
Perhaps, however it reinforces the validity of the trade I made a few weeks ago: an intentionally short term trade where I was playing the bounce. Yes, I got in a little late, and exited a little early, but I achieved my goal and followed my own rules. You obviously don't like trades like this, and that's ok. Each person has their own approach and style.
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Why don't I like these kind of trades? (aka "mean-reversion").
Of course, a stock like DB which was heavily oversold was close to a strong rebound. It was tempting to buy this weak thing. You did it, you made +10%, that was a correct reward. But with high risks, because you could have lost -10% / -20%. This was 50/50. So basically, you play with out-of-favor odds. And sometimes it works.
But in the long run, mean-reversion just doesn't work. Because you fight the trend and there is no limit to oversold or overbought conditions. The market can stay irrationnal longer than your bank account. And if you don't decide to trade properly, be disciplined and follow the trend without guessing a mean-reversion or a strong reversal, one day or another, one undisciplined trade will kill all your gains. It is a matter of time, believe me.

CM
 
Chris Mac said:
Why don't I like these kind of trades? (aka "mean-reversion").
Of course, a stock like DB which was heavily oversold was close to a strong rebound. It was tempting to buy this weak thing. You did it, you made +10%, that was a correct reward. But with high risks, because you could have lost -10% / -20%. This was 50/50. So basically, you play with out-of-favor odds. And sometimes it works.
But in the long run, mean-reversion just doesn't work. Because you fight the trend and there is no limit to oversold or overbought conditions. The market can stay irrationnal longer than your bank account. And if you don't decide to trade properly, be disciplined and follow the trend without guessing a mean-reversion or a strong reversal, one day or another, one undisciplined trade will kill all your gains. It is a matter of time, believe me.

CM
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The odds aren't 50/50. The odds of a temporary rebound is greater than 50%, particularly with such a bank and bail out talks and expectations of a legal settlement which is what I bought into a few weeks ago. However, you do have to be very strict and cut your losses.
 
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SimpleTrades said:
After the earnings report and the subsequent 19% rise, I decided to short this stock at $119.10. Anybody else thumbing their nose at the stock? Please, tell me why you think I've blundered.
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Shorting stocks this late in the market cycle isn't a bad idea because payoff is almost guaranteed - eventually. On the other hand I prefer to short indexes and the biggest market caps because they're more predictable.
 
SimpleTrades said:
How far she falls, nobody know.
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Traders who know how markets and stocks work would say : not really far.
For the coming months, NFLX will outperform the market. This is a darling.
During the last two weeks, internet stocks are falling : EBAY (-15%), BABA (-12%), FB (-10%), AMZN (-10%), except Netflix with a little -6% (vs Nasdaq 100 : -5%)
This emphasizes an exceptional relative strength compared to peers.
NFLX : maybe (and I say maybe) a correction @110/112 dollars ? => STRONG BUY.

CM
 
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