NEW YORK (TheStreet) -- The stock market again rallied to record highs as investors remain optimistic during the third-quarter earnings season.
Netflix (NFLX) reported earnings on Monday after the close. The stock jumped in after-hours trading and opened at a new all-time high on Tuesday before plunging 17% and closing near session lows.
Josh Brown, a financial adviser at Ritholtz Wealth Management, said that on the technical side, the stock formed a "bearish engulfing candle" where the open, high, low and close from one session are wider than in the previous session.
He advised not buying the stock due to the bearish technical pattern and told investors to wait for the stock to bottom out.
Steve Grasso of Stuart Frankel said a lot of fund managers may be pulling out of momentum names for the time being and going into steel and industrial companies. Eventually, they'll rotate back into the momentum stocks.
Mike Khouw, managing director and primary strategist at DASH Financial, said those looking to short Netflix could start to consider it now that sentiment seems to have turned much more bearish.
Jon Najarian, co-founder of optionmonster.com and trademonster.com, noted someone appeared to be selling large blocks of the stock. It turned out to be hedge fund manager Carl Icahn, who tweeted he had sold some of his stake while the show was in progress.
Grasso said this might be a good thing for those looking to get long since Icahn was simply locking in gains. Brown disagreed, saying that while it is responsible to realize profit, he doesn't want to be buying when Icahn is selling.