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Posts Tagged ‘Netflix’

Netflix is Ready to Break to a Fresh Record High

Monday, June 22nd, 2020

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Netflix closed the past week out strong and looks ready to continue the upward momentum. Take a look at what the following analysts had to say about the stock – Netflix ‘Impervious’ To Coronavirus, Recession: Imperial Capital and Netflix Stock: An Easy 2x

Technicals

NFLX falls in a group of stocks that were quick to recover from the sell-off earlier in the year.The stock has been consolidating within a range since mid-April but the upward momentum seen over the last week or so, combined with a strong weekly close, tilts the odds towards an upward break, in line with the broader trend. To the downside, $416 is considered to be a major support level and has held the stock higher on a weekly close basis. This same level previously served as resistance, holding NFLX lower in 2018. A break above $455 would signal a bullish continuation that stands to attract more buyers and a potential acceleration in momentum.

NFLX Chart June 2020

NFLX Chart June 2020

If you agree there’s further upside ahead for NFLX, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open NFLX 24JUL20 445 Puts (NFLX200724P445)
Sell To Open NFLX 24JUL20 450 Puts (NFLX200724P450) for a credit of $2.24 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when NFLX was trading near $453.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $222.70 and your broker would charge a $500 maintenance fee, making your investment $277.30 ($500 – $222.70).  If NFLX closes at any price above $450 on July 24, both options would expire worthless, and your return on the spread would be 80% (913% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates June 20, 2020

IBD Underlying Updates June 20, 2020

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

The Post-Earnings Dip in Netflix (NFLX) Offers a Buy Opportunity

Monday, May 4th, 2020

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Several analysts have become increasingly bullish on Netflix after their most recent earnings report, here are two of them – 3 Reasons Why Netflix (NFLX) Is a Great Growth Stock and Netflix: A High-Growth Utility Despite Its High Valuation.

Technicals

Netflix is one of the few well-known companies that has broken to fresh record highs after the Coronavirus inspired drop in March. In the process of doing so, the stock has broken above an important price level at $385 that was a hurdle on three distinct attempts between late 2018 and March of this year. This technical breakout could lead to notable gains for the stock making the current pullback a buying opportunity. Buyers have already shown signs of stepping in at the 20-day moving average, further support comes at the breakout point of $385.

NFLX Chart May 2020 Record highs

NFLX Chart May 2020

If you agree there’s further upside ahead for NFLX, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open NFLX 12JUN20 410 Puts (NFLX200612P410)
Sell To Open NFLX 12JUN20 415 Puts (NFLX200612P415) for a credit of $2.40 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when NFLX was trading near $415.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $238.70 and your broker would charge a $500 maintenance fee, making your investment $261.30 ($500 – $238.70).  If NFLX closes at any price above $415 on June 12, both options would expire worthless, and your return on the spread would be 91% (1038% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates May 2, 2020

IBD Underlying Updates May 2, 2020

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Netflix (NFLX) Shows Renewed Upward Momentum

Monday, January 27th, 2020

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Netflix, a recent addition to the IBD Top 50 list, has shown strong bullish momentum despite a brief dip following its recent earnings report. The following article highlights some of the positive takeaways from the earnings report – 6 Critical Takeaways Learned From Netflix’s Q4 Earnings Report. Also, take a look at this recent CNBC article which includes details of a price target upgrade and a video interview with Mark Cuban – Netflix stock climbed more than 7%, its best day of trading for the year.

Technicals

The strongest signal from NFLX comes from a bullish breach above $336 which was an important price point in 2019. But more important is the manner in which the stock did so. There was an initial dip lower following the earnings report, which might have spooked investors, that followed with a momentum-driven rally. This type of price action often occurs when the market participants are searching for liquidity to establish large bullish positions. It holds especially true during earnings releases as trading volumes tend to be elevated. Further, the stock once again trades comfortably above its 100-week moving average which has been an important indicator in the past. The next major level of interest to the upside is $374 while $336 is expected to support any near-term dips.

NFLX Chart January 2020

NFLX Chart January 2020

If you agree there’s further upside ahead for NFLX, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open NFLX 28FEB20 350 Puts (NFLX200228P350)
Sell To Open NFLX 28FEB20 352.5 Puts (NFLX200228P352.5) for a credit of $1.13 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when NFLX was trading near $353.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $111.70 and your broker would charge a $250 maintenance fee, making your investment $138.30 ($250 – $111.70).  If NFLX closes at any price above $352.50 on February 28, both options would expire worthless, and your return on the spread would be 81% (924% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates January 25, 2020

IBD Underlying Updates January 25, 2020

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Netflix(NFLX) Pulls Back After Earnings, Is It a Buy?

Monday, April 30th, 2018

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Netflix(NFLX) Pulls Back After Earnings, Is It a Buy?

Recent hikes in the price target for Netflix stock among analysts suggest there is further upside.  Stifel Nicolaus has raised their target from $345 from $325 and Raymond James increased targets from $290 to $330.

NFLX has pulled back since its earnings report but price action over the past few days suggest some exhaustion as a doji candlestick pattern has printed and the stock price has edged higher since.  This pattern was established at the 50-day moving average which remains a key indicator to the downside.  Further support is seen slightly below it in the form of a rising trendline.

NFLX Chart April 2018

NFLX Chart April 2018

*source Tradingview.com

If you agree there’s further upside ahead for NFLX, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open NFLX 01JUN18 307.5 Puts (NFLX180601P307.5)
Sell To Open NFLX 01JUN18 310 Puts (NFLX180601P310) for a credit of $1.08 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when NFLX was trading near $312.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $105.50 and your broker would charge a $250 maintenance fee, making your investment $144.50 ($250 – $105.50).  If NFLX closes at any price above $310.00 on June 1, both options would expire worthless, and your return on the spread would be 73% (833% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates April 26, 201

IBD Underlying Updates April 26, 201

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

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Success Stories

I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

~ John Collins