4 Trade Ideas for Netflix: Bonus Idea

• Posted by Greg Harmon
• on October 28th, 2024

Here is your Bonus Idea with links to the full Top Ten:

Netflix, $NFLX, comes into the week approaching resistance at the all-time high set last week. This is after gapping up over the full retracement of the 2022 drop range following their earnings report. It has a RSI in the bullish zone with the MACD positive and rising. The Bollinger Bands® are opening to allow a move higher. There is no resistance above 773. Support lower is at 749 and 736. Short interest is low at 1.7%. The stock does not pay a dividend.

The company is expected to report earnings next on January 21st. The November options chain shows open interest spread from 700 to 775 on the put side and focused at 800 then 775 and 750 on the call side. There is a similar spread of open interest in the December chain from 700 to 770 and a focus at the 750 then 770 and 800 strikes on the call side. The January chain has biggest open interest at the 750 put and call with the 800 call next.

Netflix, Ticker: $NFLX

Trade Idea 1: Buy the stock on a move over 773 with a stop at 736.

Trade Idea 2: Buy the stock on a move over 773 and add a December 760/730 Put Spread ($13) while selling the January 840 Call ($13).

Trade Idea 3: Buy the December/January 800 Call Calendar ($11.50) while selling the January 680 Put ($11.50).

Trade Idea 4: Buy the January 700/775/820 Call Spread Risk Reversal (75 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with just one full week of trading to go ahead of the election and November FOMC meeting, saw equity markets prepped to go into next week after one of choppy trading.

Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates at the bottom of a broad range. The US Dollar Index continues to move to the upside while US Treasuries pullback in consolidation. The Shanghai Composite looks to continue the short term move higher while Emerging Markets consolidate in their young uptrend.

The Volatility Index looks to remain low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY have reset on momentum measures as they move sideways. The IWM continues to disappoint with another sputtered break out reversing. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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