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Wednesday
Dec082010

Is Netflix (NFLX) Breaking Down?

Netflix (NFLX) has been in a strong uptrend for five months now, moving up and down within an upward sloping trading channel.  The stock is currently on the downswing within its channel, falling $20 or so over the past week.  The declines -- accompanied by the departure of its CFO -- have many exclaiming that the party is over for Netflix.  In our view, until the stock breaks below the $178 level, the uptrend has to be respected.  Investors that have sold on any prior pullbacks in the stock are still kicking themselves. 

 

Reader Comments (2)

Look at the short interest float of over 25%. Its crazy high! Look at the open interest configuration for Dec and Jan options. Putting all this together, the laws of mathematics will simply not allow NFLX to go below 165-170 and may not even allow to go lower than 180 for intermediate term. Long term investing wise, the valuations are still rich though. But I am certainly in for an intermediate term long trade.

December 8, 2010 | Unregistered CommenterStocksRider

The departure of their Chief Financial Officer, which is their only 'negative' news, has nothing to do with impairing their ongoing success. If their COO (or maybe CEO) was leaving instead, then such might be of interest. Their spectacular success, particularly of late, has to do with superior market strategy and operations, not accounting manipulation. All recent factual news regarding them points to revenues and profits rising dramatically in the short and long terms.

December 9, 2010 | Unregistered CommenterJG

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