Netflix stock's recent peak comes amid low implied volatility
Netflix Inc (NASDAQ:NFLX) is flashing another historically bullish signal as the shares -- last seen fractionally higher at $697.16 -- remain just below their Aug. 20 all-time high of $711.33, giving investors another chance to get in on the action.
Netflix's recent peak comes amid historically low implied volatility (IV), which was a bullish combination in the past. According to Schaeffer's Senior Market Strategist Chris Prybal, there were six times in the past five years when NFLX was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower. This is now the case with the stock's SVI of 25%, which sits in the low 16th percentile of its 12-month range.
Prybal's data shows that one month after 67% of these signals, Netflix stock was higher, averaging a 3.1% pop for that time period. From its current perch, a move of similar magnitude would put NFLX at around $718.77 per share -- a new record high.
Netflix last hit a record high on Tuesday, after a blog post that boasted a "150% plus increase in upfront ad sales commitments over 2023" and closed partnerships for a swath of fan-favorite films and series. Now up 43% year-to-date, the shares have staged a neat bounce from an Aug. 5, three-month low of $587.04, an area that coincides with its 160-day moving average.
