How can we tell if the sentiment may turn bearish or bullish? Reading dark pool activity is a great way of seeing what the smart money is doing with Netflix stock. Dark pools are private exchanges where larger institutional investors can buy or sell massive blocks of shares without fear that those transactions will affect the public markets. By following the dark pool indicator, we often get to see institutional sentiment and sometimes, we can even get a tip off as to a major upcoming move from the stock.
Dark pools are an exchange where things like insider trading or insider knowledge can be seen as well. Follow the smart money, because a lot of times they can catch wind of something before the news even breaks to the rest of the world. Is that unfair? Sure, but as investors we need to take advantage of every edge we can get, and dark pool activity definitely gives that to us.
There are very few dark pool prints on $NFLX, same with block trades. So we just have the algo and dark pool indicator to go off of. First, the normal algo indicator as of 7/21. As you can see, we are currently at algo support:
Now the dark pool chart. Keep in mind this changes from day to day, but trends can be observed and each stock has unique behavior you can study.
NFLX Stock Analysis
We all know the story by now: Netflix (NASDAQ:NFLX) began as a DVD rental service in the 90s, mailing out DVDs in the famous red envelopes. In less than twenty years, founder and co-CEO Reed Hastings has taken the brand and evolved it into a $240 billion, industry leading company. Netflix has become so ubiquitous with streaming on demand, that the company is now a verb for watching TV or movies. Just ask Google and Zoom investors how well that has worked out!
Netflix has always been included in the FAANG acronym, despite every other company in that group having a market cap of over $1 trillion. Over the past year or so, Netflix has traded mostly in a tight range, following blowout quarters during the peak of the COVID-19 pandemic when most people were staying inside of their homes. Netflix also ran into some stiff competition from Disney which released its Disney+ streaming platform in late 2020, an event that some people signaled as the death of Netflix.
Netflix recently announced that it would be entering the videogame industry, by offering the service directly integrated into its streaming platform. Details of how the games will actually be played by users have not yet emerged, although there is anticipation that Netflix will utilize its large library of intellectual property, using shows like Stranger Things to attract younger users.
NFLX Trading Activity
Netflix has traded in a tight coiling range for the better part of the last year and has shown signs lately that it is ready to break out in one direction or another. There are volume gaps both above and below, so keep an eye on current market sentiment as there has been a recent pull back in popular growth names. Considering what has been a fairly bearish year for Netflix investors, the MACD has flipped, indicating there could be some more bullish flow coming back to the stock.
Dark Pool Charts
Now we hope you can see why using this dark pool data can be invaluable to our trading process. If you are an options trader, dark pool charts can alert you to things like options sweeps and large call or put contract blocks. If you can get in while options premiums are still low, you will have a serious edge over other retail traders. FlowTrade is the ultimate smart money algorithm that can provide real time dark pool data and flow. The intuitive user-friendly platform allows you to track four different stocks simultaneously on your computer and even your track via your mobile phone, with plenty of scanners and even the ability to draw your own stock charts. Try a free 7-day trial today and see why tracking algos and dark pools is a great way to track the smart money and see where that flow is heading before anyone else on the market!