TopOptionAlert
Oct 23, 9:54 AM
$NFLX NOV20 70C · still actionable
Zone:
$66.60 to
$67.50
Invalidation: close under
$65
Objectives:
$70.50, then
$75
The math: up 5.1% to the first objective and 11.9% to the second, against 3.1% risk on the invalidation, better than 3 to 1 to the second.
Netflix got dumped after earnings on a guidance haircut, not on the business itself. Revenue beat, margins hit 34.6%, and the company just spent a record 4.8 billion dollars buying its own shares back, which is management voting with real money that the stock is cheap. The shares now sit a few dollars above the 52 week low, with the sellers looking spent. When a crowd panics over guidance and the stock bounces 3 percent the next day on heavy volume, that is usually the washout, not the start. This is a swing: ride the snapback toward 70.50, then 75.
P.S. Q3 earnings are done and Q4 is not until January, so this November expiry carries no earnings report inside it.
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