Netflix Inc: Short/Sell Idea

2019年2月1日

Along with the overall market, Netflix has rebounded strongly since late December 2018, appreciating from $233 to it’s last close of $339. The recent swing highs saw the price test the overhead resistance while also re-testing the underside of it’s 200-day moving average. The rebound saw the share trade in oversold territory, has since given a small pullback and is currently wrestling with it’s 200-day moving average. From a fundamental standpoint, the valuation appears quite lofty, with the share trading at 125 times trailing earnings, cash flows operations becoming increasingly negative, while the company’s debt to equity ticks higher. With the share price appearing vulnerable from a technical perspective and the fundamental metrics rather unappealing, traders could look to short/sell the share at currently levels. Alternatively, traders could utilize put options to take advantage of a potential downside move.

Trade Levels:

Short/Sell Netflix above $340

Stop-loss: $348

Take Profit Target: $305