NFLX trades irrationally and does not trade on fundamentals, technical analysis, or analysts' opinions. About 27 millions shares traded today compare to the average 3 to 4 million shares. That's not short covering. That's institutions loading up on NFLX to "look good". Since NFLX has zoomed 300% since last Sept. 2012, it would not surprise me that every hedge fund and portfolio mgr. is buying some NFLX here. Sometimes they do it at the expense of the investors by buying at the top, but you do not know that because the cost basis are never reported. As long as they have NFLX in their quarterly reports, investors will like them.
But watch the volume carefully during trading hours, NOT after hours in NFLX. Until the liquidity (volume) dries up, it's hard to say when the buying spree will slow down. When AAPL dwindled from 600 to 500, I notice the volume in FB grew substantally, and the volume in AAPL diminished.
He nailed it, it's a short squeeze. I took a ton of pain on NFLX during the last bubble. I kept thinking fundamentals would catch up, but all that happened was Hastings putting out stupid press releases that drove it higher. Cramer and every other D-Bag pumped it up to $300. By that time most shorts were dead and threw in the towel. Then Wall Street turned on it along with it's subscribers and I an many others made our money back and then some.
I learned though that the saying is true "the market can stay irrational longer than you can stay solvent." This same thing happened with CMG,CRM, and the never ending joke known as AMZN. Amazon has been a bubble for years and years murdering shorts. This sort of thing can last for a very long time. Buyout rumors will start, new press releases will drive it up more, and every analyst will pump it. Until the short position gets under 8% or so, this will most likely continue. If you choose to stay short then I would suggest put spreads on real far out leaps. Eventually it will come back down to Earth, but in the mean time it may be stressful.
And don't forget that old goofy looking crown billionaire Icahn got a big part on this, if not for him people would cover that junk at 50s after the last quarter's earning came out with a nice profit! He's robbing commoners' money so he can be an even richer billionaire!!
thought its a bubble, it is here to stay and you must understand that
its best to buy/trade CALLs and the stock itself on dips and sell at the rips and trade it quickly multiple times, and pocket the profits each time, and play along with the bubble without thinking why & how this stock is so overpriced. then once bubble actually bursts, then go in all short
It was all FORCED short covering. Has a 3 year old ever heard of margin call for shorts??? where millions of shorts are forced to cover at market price, so MMs gap it up temporarily and make them pay thru the nose and then some
Once that short covering is done, it goes back down over time as a buyer vacuum is created (as nobody likes to overpay) in due time
Its a bubble, nothing more. only thing is that bubble hasnt burst yet thats all so everything seems rosy