Other market studies on June 20: Netflix and oil

  1. Netflix is insanely overbought. Not bearish yet.
  2. OPEC wraps up its meeting this Friday. Oil tends to go up in the short term after OPEC meets.


Netflix is insanely overbought on the monthly bar chart. Netflix’s 14 monthly RSI (momentum indicator) is at its 2nd highest level ever.

What does this mean for Netflix?
It means that Netflix will probably make a bearish divergence in the next few months:

  1. Netflix will fall for 1 or 2 months. RSI will come down.
  2. Then Netflix will make new highs.

Here are Netflix’s previous peaks.

So yes, “eventually” Netflix will crash. But in the meantime, it’ll probably make a bearish divergence and then go higher.
Remember: overbought is bearish. But extremely overbought is bullish (because a bearish divergence usually ensues).

OPEC and oil

OPEC will wrap up its meeting this Friday. Over the past 10 years, oil has a tendency to go up 1-3 days after OPEC meets. After that, the forward returns are mostly random.

Click here to download the file in Excel.
As you can see, there is no distinct pattern. Trading oil around OPEC meetings os a 50-50 bet. First, you have to “guess” what OPEC is going to do. Then you have to guess how the market will react to OPEC’s decision.
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