Netflix Stock Could Be Headed Back Toward Record Levels

The equity is up over 63% year-over-year

Digital Content Manager
Nov 10, 2020 at 2:35 PM
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The shares of Netflix Inc (NASDAQ:NFLX) are up 2.2% at $480.92 this afternoon. And while the streaming concern has been cooling down after flirting with its July 13, all-time high of $575.37 in recent weeks, the security is still enjoying an impressive 63.8% year-over-year lead. Even better, the equity's latest pullback has it near a historically bullish trendline, which could catapult NFLX higher in the coming weeks.

More specifically, Netflix stock just came within one standard deviation of its 160-day moving average, after spending most of 2020 above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, three similar signals have occurred during the past three years. One month after each signal, NFLX enjoyed a 18.7% gain. From its current perch, a move of similar magnitude would put the stock above the $570 mark -- closer to its record high.

NFLX 160 Day

Though shorts are already hitting the exits, there is still some pessimism left to be unwound, which could push the security even higher. Short interest dropped 15.4% in the last two reporting periods, but the 9.42 million shares sold short still make up 2.2% of the stock's available float.

Now certainly looks like an good time to take advantage of NFLX's next move with options. The security's Schaeffer's Volatility Index (SVI) of 41% sits in the relatively low 21st percentile of its annual range. This means the stock is currently sporting attractively priced premiums. 

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