On 11/11 I wrote an article for Trader Planet noting that a correction in NFLX was probably starting. I also commented:
“As individual investors, it is a fortunate occurrence when we are offered a dip in one of the market’s strongest stocks. It usually takes some degree of market panic for that opportunity to arise, and it may arise sooner than later in NFLX.”
For dip buyers, I suggested looking at the zone between $98 and $102, which represented an area of support. True to its well-deserved reputation as a market leader, NFLX bounced off the $102 level early Monday morning and never looked back. Its 7% gain on the day indicates a huge institutional appetite for shares.
Checking Apple (AAPL), Amazon (AMZN) and Biotech (IBB), it appears we have a rotation of capital from other Nasdaq leaders into this entertainment magnet. As bull markets run out of steam, investors sell winners and redeploy the cash in the names with the most momentum. Netflix is the anointed one. The Soros Fund added to its NFLX position in the 3rd quarter, but trimmed its overall equity holdings by about 40%.
The nearby targets for NFLX are $120 and then the green zone around $125. If the market can maintain a positive tone for a while, NFLX could easily make new highs before the end of the year.
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