Lockdown Stocks: NFLX

29 ott 2020

NFLX

With Covid-19 cases on the rise again, some companies will profit more from upcoming lockdowns than others. I believe NFLX to be one of the companies that can profit from the current "stay-at-home" environment and I thus consider building a medium term position post Q3 earnings sell off, given the current support levels hold true.

To me the underlying fundamentals, although taken as an initial disappointment by the market, are encouraging and pointing in the right direction. Thus making the stock something I'd be willing to buy for the longer run.

Technicals

• The stock since its July breakout has formed a trading channel with a $575 peak and $460 at the bottom
  
• Post Q3 earnings the 50 EMA was broken
  
• Price seems to bottom out in the $485 forming Spinning Top, Hammer and Doji candles
  
• Decreasing trading volume supports bottoming out thesis
  
• Bottom of price channel ($466) has previously acted as support, if broken next support (dynamic) would be 200 EMA at $450
  
• MACD firmly negative
  

Before engaging into a long position I would want to find confirmation of a trend reversal, such as breaking above 50 EMA and a reversal in the MACD
The future behavior of the stock will decide my entry strategy. At this stage, selling short term puts around $460 seems appealing.

As always, feedback, comments and ideas from the community are highly appreciated.

***The above represents a purely personal view and should not be considered investment advice***

2 nov 2020

Nota

Currently in testing ground of the above explained sideways channel.

Too early to say where we go from here. MACD still suggest negative momentum and general pre-electoral market volatility will not help either.

I am generally positive on the stock and might consider shorting the NOV 20 450 P as I'd be ok to own the stock at those levels.

11 nov 2020

Nota

Still too early to call. We seen a rotation out of major stay-at-home names after the US election and post the Pfizer vaccine news.

The lows of September ($458) has not been reached and would imply some buying interest around $460. However the recent $485 support has been broken and seems now to act as resistance.

I believe mid to long term the stock is a solid play to the upside and would be tempted entering around the $460 levels