NFLX Stock Looks Attractive

I picked up some calls on NFLX stock today and wanted to talk a little about my strategy for this particular trade. This is not my typical trade for the reasons that I normally don’t trade options and it’s not a momentum play. It seems that the trading gods are punishing me for trading outside my trade plan today as all my gains on  my ETF’s are being offset by NFLX stock declines.

I have observed in the past when a momentum stock falls off of my list it will often find support near it’s 20 week ema, unless there is something fundamentally wrong with the stock. I’ll cut my losses at a weekly close below the 20ema or I’ll hedge with a put option until the next level of support where I would close the put and add more calls.

The only other way I’ll get taken out of the trade is if my market timing system gives a sell signal on the overall markets.