BABA, NFLX update 07/18

BABA: extended well-beyond my ideal target of $113-$118, and is now either finishing all of (black) major-3 or only minor-3 of intermediate-iii. I prefer the latter given where the general markets are most likely: wrapping up major-3 as well. In that case, intermediate-v was an extended 5th wave. The weekly chart shows negative divergence on the RSI5. I expect major-4 to retrace back to the $120-$130 breakout level.

BABA

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NFLX: All eyes on NFLX due to earnings. But should you chase these lofty prices up here? IMHO it’s time to be cautious. We had an ideal intermediate-iii wave at the 1.236x extension, then an ideal intermediate-iv wave at the 0.764x extension -which was an ideal 38.2% retrace of wave-iii, and then the 5th wave -logical to assume it will be ideal too- should target the 1.618 to 1.764x extension in such a picture perfect case. That’s $183-$185.  NFLX is currently trading at $180… seems like there’s not much upside left. This is of course baring any extensions, but I can’t foresee those and we thus have to go by the standard stuff first: being conservative never hurts in this game 🙂 Given where I believe the market is (close to major-3 top) it’s also prudent to assume NFLX is closer to a top then a bottom as well.

nflx