NETFLIX LONG @400
TRADE TYPE: This scenario is a swing trade. Seeking for high potential profits following quarterly earnings report.
TIME: It should happen over the next week leading up to earnings: 21/04/2020. Stock may rally more following earnings release.
RISK: Fairly low, as the company is doing great and benefiting from the current global crisis. Currently viewing this trade as a potential Homerun.
TECHNICAL ANALYSIS: Technically there is a continuation of the uptrend and psychological price point will be at 400 with upcoming resistance at 420. From the current levels a 5-6% increase is needed to reach this level known as all-time high for the stock which shouldn't be a problem due to high volatility in the current markets. Keep an eye on trading volume as we are coming out of Easter weekend.
PERSONAL OPINION: Netflix is nearing all-time highs as quarterly results are approaching in 1 week. As we've seen in the past, we've seen upwards price movement following results higher than expectations. Netflix will have performed better this quarter due to an increase in subscriptions due to Corona virus. The clients will also perceive a higher value from the service due to increased vue time because of worldwide confinements. Furthermore, being a low cost subscription based service, many new customers and free-trials will have been contracted. Many of these subscriptions may lead to new long term customers that are above 30 years old with a higher purchasing power meaning a higher rate of retention. I have experienced this first hand with friends and family subscribing for plans themselves. I believe upon breaking all time highs we will see a similar scenario as to what happened to Tesla in the beginning of the 2020.
TRADING PLAN: Buy in around 380-400. SL: 360 TP 1: @500; TP2: @600; TP3; @800. Upon reaching TP1, set tracking stop loss with 50 points difference so for TP1 it would be @450. You may set this Tracking SL once you reach 450 . This will enable the trade to be risk free so you are break-even (you might want to take into account the fees charged by your broker and adjust accordingly) at worst or profitable whatever the outcome and enable you to ride the momentum of the wave until reversal leaving a sufficient margin to not get stopped out by slight pullbacks. At the beginning of the trade a slight pullback is possible on the 400-420 mark so don't panic.
NOTE: Keep in control of your emotions and don't let the confinement situation cloud your judgement as it is affecting our lifestyles and may bring frustration into ones personal life.
TIME: It should happen over the next week leading up to earnings: 21/04/2020. Stock may rally more following earnings release.
RISK: Fairly low, as the company is doing great and benefiting from the current global crisis. Currently viewing this trade as a potential Homerun.
TECHNICAL ANALYSIS: Technically there is a continuation of the uptrend and psychological price point will be at 400 with upcoming resistance at 420. From the current levels a 5-6% increase is needed to reach this level known as all-time high for the stock which shouldn't be a problem due to high volatility in the current markets. Keep an eye on trading volume as we are coming out of Easter weekend.
PERSONAL OPINION: Netflix is nearing all-time highs as quarterly results are approaching in 1 week. As we've seen in the past, we've seen upwards price movement following results higher than expectations. Netflix will have performed better this quarter due to an increase in subscriptions due to Corona virus. The clients will also perceive a higher value from the service due to increased vue time because of worldwide confinements. Furthermore, being a low cost subscription based service, many new customers and free-trials will have been contracted. Many of these subscriptions may lead to new long term customers that are above 30 years old with a higher purchasing power meaning a higher rate of retention. I have experienced this first hand with friends and family subscribing for plans themselves. I believe upon breaking all time highs we will see a similar scenario as to what happened to Tesla in the beginning of the 2020.
TRADING PLAN: Buy in around 380-400. SL: 360 TP 1: @500; TP2: @600; TP3; @800. Upon reaching TP1, set tracking stop loss with 50 points difference so for TP1 it would be @450. You may set this Tracking SL once you reach 450 . This will enable the trade to be risk free so you are break-even (you might want to take into account the fees charged by your broker and adjust accordingly) at worst or profitable whatever the outcome and enable you to ride the momentum of the wave until reversal leaving a sufficient margin to not get stopped out by slight pullbacks. At the beginning of the trade a slight pullback is possible on the 400-420 mark so don't panic.
NOTE: Keep in control of your emotions and don't let the confinement situation cloud your judgement as it is affecting our lifestyles and may bring frustration into ones personal life.
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