For Immediate Release
Chicago, IL – May 3, 2010 – Zacks highlights commentary from People and Picks Trader “MightyMo”.
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Featured Post
Mighty_Mo Market: NFLX…a Sell
First, the marketing brag (which I know most of you out there don’t like).
Our website portfolio continues to hum on all cylinders. This is especially remarkable since the picks were selected from strength…the stocks had already made a good move when they were picked…(you can buy on strength in a bull market).
OK, now about Netflix (NFLX). As I write this, the stock is neutral to positive in the pre-market today. The stock has percolated up from 73.62 at the start of April to 103.17 at yesterday’s close.
NFLX is sitting on a 100% gain in our website portfolio. Usually I would allow the stock to run it’s course. However, one disturbing aspect about the stock is the percentage of institutional holdings (including mutual funds). It is over 100% (due to short float). Even without the short float, anything over 90% is extremely dangerous. Once institutions start selling a stock, it usually has a very quick and fast drop.
I have no idea what NFLX will be doing in the next 90 days, but the risk is greater on the down side than up side (again due to the high percentage of institutional holdings). I’m usually a proponent of buying stocks that have gone high as I expect them to go higher. In this case, I think the opposite is true. We are going to close our position in the stock.
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