Wondering how to trade Netflix (NFLX) tomorrow? Here’s your strategy! (April 17, 2017)


We are looking at Netflix ( NASDAQ:NFLX ). This has been trading sideways, seems like forever, for the whole first of the year. The first quarter just drifting sideways. The company reports earnings and it is now trading at an all-time high, but not by much, not by much at all. Earnings, they beat the numbers, but their subscriber growth was not as good as expected. And since, in this business, subscriber growth is kind of everything, that is a problem. What is interesting to me is, even though subscriber growth was less than stellar the stock is up. And so that tells me that this has room to move higher.

Lets go ahead and look at the post-market stuff. Here is a 15-minute chart and I am going to take it down to 5-minutes, shoot, I will even take it down to 1-minute. Here is why: When a company first reports earnings the first move is virtually always wrong. I swear; I don’t know if it is algorithms or idiots or just gamblers but for whatever reason the stock trades down, big volume right away and then has continued to move higher. You will see at other times where the stock gaps up, trades up very high and then after a minute or two or three or maybe 5-minutes, Boom! It goes back the other way. So now finally where are we? We are trading right around here, 149.00ish. And where did the stock close? It closed around 147.00ish, so it is up 1.5 percent after hours.

This is not that impressive of a move, so this is what I would be doing: I like Netflix ( NASDAQ:NFLX ), I think the valuation is nuts but I think the valuation is nuts on a lot of stocks that I own. I own them because I like the charts. Here, I think you have got to watch this stock. If it CANNOT get through 150.00 tomorrow, not Wednesday, not Thursday. If it can’t get through 150.00 tomorrow then I would suggest selling the stock; 150.00 is a pretty solid ceiling. On the other hand, because there is always another hand, Randy Travis told us that, if the stock does break through 150.00 then it probably has come legs to go higher.

So be careful about how it trades tomorrow. Again, 150.00, get long. Not 150.00, go ahead and sell the stock. I wouldn’t, by the way, short it at these levels because that is not much of a gap and there is still plenty of consolidation right between 140.00 and 145.00.

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