I'm no expert, but regardless of the crash from its highs to the sub-100 territory it's in now, NFLX looks like it is spiking higher and the range-bound trading we've seen between 74 and 80 has been consolidating upwards, with higher near-term highs and higher near-term lows, creating a floor from which it looks like it wants to launch another 7 to 10 points to near-90, and that's just on it's current momentum with no additional fuel (i.e., more substantive buyout news). Anyone see the same thing?
So, I don't really understand the exuberance of shorts who celebrate what deceptively seems like stagnation of the NFLX share price in this trading range. All things remaining the same, it looks like it's about to bury shorts another 5-15%. And that could happen in less than 24 hours. Yikes!
Consolidated securely at top of 75-80 range. Netflix rocket fueling on $80+ launchpad. All this in a murderous broader market. I'm no expert, but were I short, I'd cover promptly NOW. Don't risk an end of week rally to push this 3 to 4 points higher tomorrow (bucking opex), or some AH or pre-market takeover news to zoom this 5-8 points into the stratosphere, or some Monday news like a BID @ 120+. Heck, by Monday morning the market will realize the sky isnt falling re the "fiscal cliff" and that, along with opex out of the way, will send this 3+ points higher.
One reviewer commented that Technical Analysis is useless with NFLX. That's not accurate. You two may have different timing horizons.
Three or four times since January the stock has shown breakout AND subsequently jumped on swing trade action. So it's smart looking for those situations as you are. Does NFLX's current range bound pattern signal an upturn? Not in my opinion, not until it actually breaks.
It's a judgment call. Earlier when NFLX broke from a 3-4 week trend it was clear-cut. Consolidating in a $5 range much less so.
In fact, looking through the commentary on Icahn's interest in Netflix, it was hard to find anyone who had anything positive to say about it.
Which brings us to another point. The market is short NFLX in a big way.
As of Oct. 15, 2012, there were 16.2 million shares of NFLX short, equal to 29.1% of shares outstanding. That's more than two days of trading at current elevated volume.
In addition, there are another 26.7 million shares worth of out-of-the-money put options with strike prices between $60 and $77.50.
There is only one way to close a short position in a stock-you have to buy it back. What we have here is an Icahn-inspired short squeeze in Netflix. NFLX shorts are scrambling to cover as quickly as possible, putting more buying pressure on the Netflix share price.
How far can the short squeeze run?
It looks like NFLX will have to take a breather around the 200-day simple moving average, which currently stands at $82.35. With Icahn in the game, NFLX could break above the 200-day simple moving average but we are likely to see consolidation around that level first, as the current round of short covering subsides.
Since this was written, Netflix short interest is now over 17 million shares. "...looking through the commentary on Icahn's interest in Netflix, it was hard to find anyone who had anything positive to say about it." And look at how active the shorts are on this board trying to control the story. THEY ARE DESPERATE TO THE EXTREME. Imagine Yankee Stadium filled with shorts, their bowels ready to explode and only one bathroom for relief. That's the kind of panic which will happen if anyone makes a bid for Netflix because if we have one bid, we will have many bids. The Sandvine reports makes it clear that there is no number two to Netflix since Hulu and Amazon Prime are 1/18th of Netty's streaming volume.
You're right you are no expert. Ready to jump another 10? Range bound trading? I think what you are referring to is the manipulation that we have all seen for the past week or so. Do you think it is normal for a 75 stock to trade in a 5 dollar range and hit the top and bottom of that range every day in a given week? Thanks for the additional certification that this thing is headed south big time in a hurry.
Sentiment: Strong Sell
What a pos loser you are. Volatility is the name of the game with stocks, good or bad. Unless you are not trading which I know you are not. Just a pathetic loser with no money and nothing to do.
Sentiment: Strong Buy
You are the opposite of an expert, more like a brainless idiot who has no one else to speak to. You and Rocco from seeking alpha should run away together and have a gay marriage and anti Netflix gay babies. At least he decided to shut the hell up about Netflix. You continue to chirp little a little retarded bird. Go away
Sentiment: Strong Buy
The only people who are positive on nflx are the #$%$ on this board which is pretty scary. Technical analysis on this stock is for fools but go ahead and buy hoping for a move to 85. All you longs should take the 500 dollars that you we're going to use to buy 7 shares of nflx in the am and just buy some powerball tickets instead. Wake up people
Sentiment: Strong Sell
And I suppose you ARE an expert, hmm?
One novice to another, I never said what we're seeing is "normal". Quite the opposite, actually. It's abnormal. There's definitely price manipulation here, but to the downside, due to shorting, profit-taking, and options-expiration. But these forces come at a price, which is why, though its traded within a range, the range itself has moved upward - from 74-78 to now ~76-~80. It's got legs @ about 77.50 as of Friday @ close, and my hunch is that the AH move to about 80 is the result of the removal of downward manipulation due to weekly options-expiration - meaning this thing might now have legs @ 79-80, which we'll know for sure a little into trading tomorrow Monday. I am admittedly no expert, but you don't have to be to see these obvious near-term trends. In order not to see them though, all you need to be is a short whose trade is significantly under water.