Above is a 60-minute chart of NFLX with the SPY plotted in the lower pane, and while I’ve been a long-term fan of Netflix as a company and as a stock, I can’t ignore what the price action is telling me right now. One of the most important lessons I’ve learned in trading is that even the strongest long-term winners can go through periods of relative weakness, and that’s exactly what I’m seeing unfold at the moment.
If you look closely, the SPY is either making a higher high or at least retesting the highs we saw about three weeks ago. But NFLX? It’s not even close. Instead of matching that strength, it’s printing a noticeably lower high. The white trendlines on the chart make this contrast incredibly clear. When the market is strong and a leading stock lags behind, that’s often a warning sign that shouldn’t be brushed aside. This divergence is what I call true relative weakness, it’s subtle at first, then obvious in hindsight.
Heading into the next session, I’m keeping a close eye on today’s low at 101.77. If NFLX breaks below that level, it could easily trigger a continuation move to the downside. And with the psychological $100 level sitting just beneath, that zone becomes an even more natural magnet for price. Traders will be watching it, algorithms will be watching it, and I will be too.
For now, NFLX stays on my radar, not as a long-term investment story, but as a short-term relative weakness setup that deserves respect.
For more of my daily market breakdowns, you can head over to my homepage: https://therelativestrengthtrader.blogspot.com/
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