Today produced a high probability trade setup I always look for – Trapping Buyers or Trapping Sellers.
Context wise, NFLX is in an uptrend as seen in the expanded daily chart below.
The last 2 days, however produced red pullback bars within the uptrend. This sets up a classic opportunity to trap recent
sellers if price action leads us there. Today, with price opening higher, near upper blue line resistance, and above yesterdays recent resistance, the stage was set to trap the sellers over the last two days (down price action on chart).
4 minutes after the open a perfect Price Flow buy signal developed to Buy @333.51 (Arrow at entry) and 20 minutes later you were able to scale out at 334.63 to set up a no-risk trade for the remaining shares with a first target to yesterdays high area near 338.
Price moved higher as expected, surpassing yesterdays high and reached a price of 340.85 (I exited with a 4 point gain at 337.50) as the morning trading session ended, offering the opportunity’for nice $$ gains on this high probability trade.
Red price bars during an uptrend presents an opportunity to trap sellers. Today Price Flow price action offered such an opportunity right at the open of trading.