Hey Traders! I hope you day is going quite majestic. I know many of you are going to have opinions, questions, thoughts and facts on NFLX. Here is my analysis after the earnings have come out.
Very rarely in trading do the earnings numbers actual matter. I’ve seen many stocks (especially AAPL, TSLA and NFLX) just crush earnings on all levels and I’ve also seen a stock gap up on terrible numbers.
What often matters on earnings is the gap. How strong is it? How many people are trapped or losing money? The best way to do that is determine the sentiment of candles and ask “is the stock moving / opening past any pivots?”
On NFLX going into earnings, myself and a few other Real Life Traders have a Jade Lizard. 130/140 bear call spread and a 80 naked put? Why 80 and why naked? Well it was naked because I truly do not mind owning shares of NFLX at $80. And $80 because that’s a very strong support on NFLX.
So, here’s my thoughts going forward.
The blue line is the 100 simple moving average. It appears to me that NFLX is in a large channel. Therefore, I would be looking to buy low and sell high. Quite simple. As I am writing this right now, NFLX is gapping down about 10%
If NFLX opens below $97.00 I would slightly expect it to continue a tad lower into $90 ish over the next few weeks. Where I would look to buy long. IF NFLX opens above $98 and below $106, this tech giant will likely continue to be stuck in this giant channel and traders would likely consider non directional option trades as the most likely winning candidates. Non directional trades being credit spreads, debit spreads or other options selling strategies.
The open of NFLX will be key. If you have any questions hours or days after this gap, post that question below and I would be happy to answer it.
Also, if you want some of this analysis in a quick video format, feel free to check out my Monday Real Life Stock Review. I cover NFLX, AMZN, AAPL and more.