If past is precedent, NFLX could rise toward former highs
The new year is right around the corner, and we've got the scoop on the best stocks to own in January, historically. Today, we want to focus on one FAANG name that is almost guaranteed to turn in big gains in the year's first month: Netflix Inc (NASDAQ:NFLX). The streaming is has pulled back since claiming a Nov. 17 all-time high of $700.99, last seen trading at $616.22, but there's plenty of reason to believe that NFLX could surge back toward its former highs -- if not surpass them.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, over the last 10 years, NFLX stock has been one of the best stocks to own in January. The security is the only FAANG and media name on White's list of the 25 best S&P 500 (SPX) stocks to own this month, and boasts an average return of 25.9%, with 80% of the returns positive. A move of similar magnitude would put Netflix stock at a fresh record high of $775.82.
On the charts, Netflix stock has added 17.4% year-over-year, even after pacing or two-consecutive monthly losses to close out 2021. Still battling pressure at the formerly supportive 80-day moving, as well as a short-term ceiling at the $620 level, the 150-day looks ready to move in as a trendline of support.
Options traders, meanwhile, have been more pessimistic, and an unwinding of these bearish bets could put additional wind at the streaming stock's back. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.46 stands higher than all but 2% of readings from the past year. In other words, short-term options traders have rarely been more put-biased.