After a few weeks of rest, Netflix (NFLX) is back on the run. (February 07, 2017)
We are looking at Netflix ( NASDAQ:NFLX ) today. This is a stock that (including yours truly) has kind of been ignored the last few weeks, because the stock popped on really strong earnings, pulled back, didn’t reverse, just pulled back and has been trading sideways ever since they reported on the 19th of last month. So this has been a stock that there is nothing to do except hold anything that you have. I would not want to be selling it, but it is not really compelling to buy. If you just kind of step back and think, “Okay, why am I buying today, or yesterday or the other day, when the stock is still in this trading range? We could see this thing peter out and it could pullback. I don’t want to hold this stock.” So we wait for signs that it is time to buy.
The high here was 143.50, right? So then we get today, now we are up at 144.00. Guess what? In my view this is the time to buy the stock. You are going to start with a small position here, and you only add to that position if it is profitable. The only time I don’t care about averaging down and, “Oh, I loved it at 140.00 so I must really love it at 120.00.” No. If you loved it at 140.00 and you are still holding it at 120.00 the position stinks, time to find something else, it should have been well before that. So what you want to be doing here is, you are taking some stock at 140.00, 144.00, and don’t really give it too much room. Give it 5 percent or so initially. And then if the stock starts moving higher, because earnings are not an issue, those are in the rear-view mirror, those are reruns now, right? So you have got a couple months anyway, until the company reports again. And it is the kind of stock that when it moves, it moves really big.
Same thing here. Now it can move both ways, like this. But we have got an uptrend here. We have got a 50-day moving average that is holding, so if you are long the stock stay long. If the stock keeps moving consider adding to that position. You are right. You are correct. You are correct on owning the stock. Volume was heavier than average today, the first time that has happened in a while. And so you be long the stock here. If it gets up to 146.00 or so, even add to the position, because at least you are profitable on it. But the bottom line is this: As we look at the stock here, this little blue line is the 20-day moving average. That is your reference point. As long as the stock is closing above the 20-day moving average, which is the middle Bollinger Band, this is a stock that you want to stay l