Can Netflix, Inc. (NFLX) Continue Its (Wet) Hot (American) Summer?

Netflix, Inc. (NASDAQ:NFLX) has been dominant on the charts, and that was before its 'Wet Hot American Summer' miniseries

by Josh Selway

Published on Jul 31, 2015 at 2:54 PM
Updated on Jul 31, 2015 at 2:54 PM

Netflix, Inc.'s (NASDAQ:NFLX) amazing year has been well-documented. The shares had already doubled before the company presented earnings on July 15. But after the company announced strong user growth, the stock shot higher for its third bull gap of the year, hitting an all-time split-adjusted high of $117.88 on July 17.


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It looks like traders think the stock has even more room to run, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NFLX has accumulated a 50-day call/put volume ratio of 1.12, which ranks in the 97th percentile of its annual range. In other words, call buying has outpaced put buying by a near-annual-high pace during the past 10 weeks.

This bullish trend is continuing today, with calls changing hands at 1.5 times the expected intraday pace. Traders are targeting the weekly 7/31 series -- which expires today -- with the 7/31 114-strike call leading the pack. In short, the eleventh-hour speculators buying the calls to open are looking to profit on gains above $114 before today's close. 

What's more, bearish traders have been throwing in the towel lately. Short interest on NFLX dropped by more than 17% during the two most recent reporting periods. Should the skeptics keep abandoning ship, NFLX could rally higher. 

Elsehwere, 10 analysts still maintain "hold" or "strong sell" opinions on the shares. If NFLX can continues its pursuit of new highs, a round of analyst upgrades could boost the shares. 

At last check, Netflix, Inc. (NASDAQ:NFLX) was 2.2% higher at $113.99, as the Nasdaq Composite (COMP) outperforms its index peers. Of course, we can only assume today's gains are connected to the new "Wet Hot American Summer​" miniseries, which premieres today on NFLX

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