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Netflix melt-up and Google breakdown

Chart update on Google ($GOOG). After breaking out nicely above longer-term resistance near $645, $GOOG has spent the last few days giving back those gains and more. 


Today we saw $GOOG open with a gap down at $646.50 and it quickly slid downhill from there, ending the day at $622.46 (-4.2%). 


As Reuters reports, Google took a slide after Motorola Mobility ($MMI) warned of lower-than-expected earnings, which prompted worries over Google's entrance into the hardware side of the smartphone market via their Motorola acquisition. So we've gone from breakout to correction mode in just a few short days.

Meanwhile, Netflix ($NFLX) continued its recent melt-up, surging 13.8% higher today. 


The market seemed excited about Netflix streaming services crossing the Atlantic to Britain and Ireland. Not to mention the short-covering rally that ensued. As the article above points out, $NFLX is up 40% in the first five trading days of the year - so much for dour 2012 predictions. 

Look for a potential gap fill play back to $115 in the near-term. If Netflix can keep building momentum in their business through the first part of the year, maybe they'll be able to regain some share momentum and slowly heal the memory of last summer's DVD vs. streaming split debacle. 

I've not been following Netflix closely in recent months, but I have been eyeing the chart in recent days and will continue to watch it here. You can hear more about their vision for the future in this Charlie Rose interview with Netflix CEO, Reed Hastings. We'll see if they execute.

Disclosure: I have no current positions in either $NFLX or $GOOG, nor have I had any position in either stock in recent weeks. Readers will be alerted to any future long or short positions I hold in individual equity names mentioned, if those positions are held at the time of writing. 

Nothing here should be taken as a recommendation to buy or sell securities. These posts are strictly for educational purposes and a market journaling exercise. Thank you for reading.

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