Netflix, like much of the market, has been trading in a narrow, confined range most of this month. Volatility for the stock is the lowest it's been in years. As we head into the end of the Month and start of September I am looking to trade $NFLX for a sharp break out of the recent mundane action.
Historically, when volatility is up for $NFLX the stock drops and when volatility dries up, the stock rallies. They say don't short a dull market, the same could be said for Netflix the last few years. When the trading gets dull, the stock gets going to the upside. Which is why I think the stock is setting up for a sharp move back into triple digits.
Below a chart of $NFLX, notice when the going gets dull, the stock gets going....when the going gets dull.... there's a song for that somewhere...
Longer term the price action is coming together for the sharp resolution.
and confirmation of the move will come on a break higher out of recent resistance.
Assuming $NFLX doesn't open a session $5 higher, I'll be waiting for the action to take the price over resistance, and confirm that the breakout back over $100 is coming.
From there, with the assumption the Global Centrally Planned Asset Price Appreciation Scheme remains in fifth gear, with the stock market soaring to fresh record highs, $NFLX could revisit previous highs from the end of last year.
And with option premiums subdued for $NFLX, there has never been a cheaper time the last few years, to trade for upside in the name.
A few trades I am looking at:
$NFLX $97 weekly calls $.45 (expire Friday)
and $NFLX September Monthly $100 strike calls $1.00 (middle of September expiration)
$NFLX Sep Chain
I'll be watching Netflix for confirmation and also for Narcos Season 2. What a great first season.