Netflix, Inc. (NFLX) Set to Snap Losing Streak, Burn Bears

Netflix, Inc. (NFLX) is up big, and on the verge of ending a seven-day losing streak

Sep 9, 2015 at 12:28 PM
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Netflix, Inc. (NASDAQ:NFLX) is on the verge of snapping its seven-day losing streak -- and in a big way. Around midday, the shares are up 7.4% at $101.99, helped by the company's newly announced plans to expand in Asia after entering Japan earlier this month.

Looking more closely at the charts, NFLX is back above the round-number $100 mark, as well as its year-to-date 100% gain level -- two potential layers of support. The waters have been choppy lately for the equity, but after pulling back from a record $129.29, it bounced sharply off its 32-week moving average and could be ready to resume its longer-term uptrend.

In the options pits, skepticism has been running high in recent sessions. NFLX's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.20 rests just 2 percentage points from an annual peak. In other words, during the last year, traders have rarely bought to open puts over calls at a faster rate.

Digging deeper, peak front-month put open interest resides at the now-underfoot September 100 strike. Data from the ISE, CBOE, and PHLX indicates a sizable portion of these positions were bought to open during the last two months. As the hedges related to these bets unwind ahead of expiration next Friday night, NFLX could find a strong short-term foothold.

The stock could benefit from future upgrades, as well. Despite more than doubling year-to-date, Netflix, Inc. (NASDAQ:NFLX) has still been on the receiving end of 10 "hold" or worse recommendations. Should upward revisions come down the pike, buying demand could get a boost.
 

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