Netflix shares are having their worst day since late January on virtually no news (unless you count speculation Carl Icahn is selling as news). And if the charts are any indication, the pain could be getting a lot worse.
Technicals are just one of many inputs I use to fashion my investment ideas. But when a chart gets this ugly—we're talking Francis Bacon meets Jackson Pollack ugly—you almost have to sell, or at least be super cautious.
With Monday's sell-off, Netflix is in serious danger of breaking the "neckline" of what traders call a "head and shoulders" pattern.
So why is this important? A head and shoulders pattern literally looks like the head and shoulders of a person, with the peak representing the "head," and the two mini peaks representing the so-called "shoulders." But what it really represents is a level at which investors look to sell.