As a follow-up to my prior post, I wanted to talk about why I did the following on Tuesday morning:
You see, I bought NFLX Puts last Friday based on what I perceived as a topping pattern. I saw in SlopeCharts that earnings were going to be happening Tuesday afternoon, and although that sort of thing doesn’t typically scare me out of position, I took another look at the chart and had one of those what-were-you-thinking moments. Specifically………..
As you can see, there are three rounded tops here. As you can also see – – but apparently, I was too stupid to grasp on Friday – – was that the prior two “topping” patterns didn’t do dick. On the contrary, as with Costco, these “tops” are complete fake-outs. Thus, I got the hell out of my position, and thank you sweet baby Jesus that I did:
The point of this post is simply to say that patterns matter, and when prices in a given stock (like, say, Netflix) REACT in a certain way following a pattern, it pays to take heed.
Phew. Dodged a bullet. I can’t believe I was so dumb.
