Three Potential Trading Tactics to Approach Netflix (NFLX)

By Feb 25, 2013, 2:10 PM Author's Blog  

Netflix (NASDAQ:NFLX) has been a great potential trading vehicle since its earnings. As an educational follow-up, I want to point out three different types of tactics to approach this name that could be used on other stocks on any time-frame.

Tactic #1: The stock saw a powerful earnings gap and provided a nice level to trade against at $139.62. The stock went higher after holding the gap, providing a great potential follow-through long entry.

Tactic #2: After earnings ignited a two-day move, NFLX consolidated for six consecutive sessions and put in a nice bull flag. During this period, the stock also held the top half of its parabolic earnings move, showing commitment. Traders could have added to their long positions above $175.

Tactics #3: After reaching very close to its major resistance of $200 on February 20, NFLX saw a small pull-back. The stock then re-tested its short-term support from prior pivot lows of $175ish today, where it held, bounced and presented a classic Red Dog Reversal trade set-up. The buy price was Friday’s low of $178.43 with a stop at the current low of $175.45. The trade has been working so far. You were risking $3 to potentially make significantly more–NFLX went as high as $186.40 on the day. It could be just a quick trade for cash flow, or it could be a nice ignited move to add some fuel to the currently rally and lift the stock up to at least the $200 level.

Three Potential Trading Tactics to Approach Netflix (NFLX)

(click to enlarge)

By John Darsie

Disclosure: Scott Redler is long BAC, GE

  • SHARE:
  • Share on StockTwits


SPY205.22  chart-0.33  chart -0.16%
GOOG536.99  chart+1.96  chart +0.37%
AAPL114.67  chart-0.80  chart -0.69%
TSLA247.74  chart-9.96  chart -3.86%
BBRY10.19  chart-0.57  chart -5.30%
NFLX363.10  chart-17.93  chart -4.71%
FB73.33  chart-1.01  chart -1.36%

Nikkei17300.859  chart+12.109  chart +0.07%
Shanghai0.00  chartN/A  chartN/A
UK6667.47  chart-29.13  chart -0.43%
France4220.96  chart-45.23  chart -1.06%
Germany9391.89  chart-80.91  chart -0.85%