High-Flying Stocks Fall Victim to Volatility

Well, that was an interesting week. It started out bad, then got worse, then furiously rallied.

That rally made the bulls feel better, but it was ominous: V-shaped bounces usually fail at resistance before falling back.  That says the S&P may test 1800 again.

The market saw a lot of high-flier breakdowns. Netflix (NASDAQ:NFLX) was one of them, but I wouldn’t buy quite yet. Instead, wait for it to sink to support, then take a stab at it.

Tesla Motors (NASDAQ:TSLA) was another casualty, but the seeds of its decline were sown earlier this year with that large Head & Shoulders. Once it broke both the neckline and uptrend, it was time to call it a day. It will come back at some point, but I’d look elsewhere for buys.

Back next week to see if the bear growls again.