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The Chartman

Warning Signals Flash on Netflix, Tesla

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It’s funny -- the economy seems in a funk, yet the market continues to climb.  Is it sending a signal that things are about to get better?

Beats me, but as long as the trend is up, it’s best to be on the long side.  Certainly the S&P looks like it has legs, and I’d expect another move up shortly.

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This week, I wanted to focus on “hot stocks” and I’m not sure there’s been any hotter than Tesla (NASDAQ:TSLA).  Or, at least it was hot.  It’s cooled a bit, so I wouldn’t consider buying more unless it breaks the current downtrend.

Netflix (NASDAQ:NFLX) has also burned down the barn, although that same day gap up/sell off was a strange move. As I recall, it came about from the CEO putting cold water on the rise, but regardless it’s a warning sign the uptrend may be faltering.

Back next week to see if the breakout I’m looking for actually happened.

What do you think?

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