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:

LEAVE A COMMENT

SPY187.45  chart-0.44  chart -0.23%
GOOG526.94  chart-7.87  chart -1.47%
AAPL524.75  chart-6.949  chart -1.31%
TSLA207.99  chart-10.65  chart -4.87%
BBRY7.36  chart+0.07  chart +0.96%
NFLX353.50  chart-19.40  chart -5.20%
FB61.36  chart-1.6701  chart -2.65%

DJIA Fut0.00  chartN/A  chartN/A
Nasdaq Fut0.00  chartN/A  chartN/A
S&P Fut0.00  chartN/A  chartN/A
Oil Fut0.00  chartN/A  chartN/A
Gold Fut0.00  chartN/A  chartN/A

Nikkei14404.99  chart-141.279  chart -0.97%
Shanghai2057.033  chart-10.349  chart +0.00%
UK6711.19  chart+36.45  chart +0.55%
France4486.82  chart+35.74  chart +0.80%
Germany9610.84  chart+66.649  chart +0.70%