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Netflix shares present potential entry point after pullback
Netflix Inc (NASDAQ:NFLX) Shares were down 0.6% at $623.12 at last check, on track for their sixth straight daily loss. The stock still boasts a 27.8% lead into 2024 and isn’t far off its two-year high of $697.49 on July 5, which was just shy of a record peak. While the 20-day moving average is now guiding the stock lower, a rising trendline now in play has historically preceded gains for NFLX.
Recent negative price action has put Netflix shares within one standard deviation of its 126-day moving average, after having traded above that trendline 80% of the time over the past two months and on eight of the past 10 trading days.
According to Schaeffer’s senior quantitative analyst Rocky White, the stock has flashed six similar signals over the past three years, after which it was higher a month later 60% of the time, averaging a 4.6% gain. A similar move would put NFLX back above $650.
NFLX 20 126 Days
Now seems like a great opportunity to bet on NFLX’s next move with options. The 28% equity Schaeffer’s Volatility Index (SVI) is in the 10th percentile of its 12-month range.