Chart Review: Netflix Topping Action Redux
Dr. Duru | Oct 23, 2013 03:31AM ET
On September 23rd, I noted a his Schedule 13D filing with the SEC announcing the sale of shares. Icahn rode that bad boy for a year from about the 60s to just under $400 or so. That is great stuff. And I bet he timed this so he would register these gains as long-term capital gains!
Note that Icahn did not sell his entire stake as I thought he would when selling time arrived. However, he must know that few investors will be interested in taking NFLX higher knowing he is in the process of getting out. Would YOU want to be the person left holding Icahn’s bag? What can take NFLX higher now? The next main hope would be for all the bearish analysts to start upgrading the stock, grooming a new set of replacement investors. I cannot imagine THAT happening either. According to Schaeffer’s Investment Research, only 5 analysts rate NFLX a buy or strong buy. Seventeen (17) analysts are neutral and 5 analysts are at sell or strong sell. That is a rare amount of pessimism for such a high-flying stock.
I was much too slow in the morning to make a move on NFLX even though I was bearish going into earnings. The only thing that stopped me from buying speculative puts ahead of earnings – besides that skyhigh premiums – was the absolute lack of analyst bullishness. Now, I can only hope for some kind of relief bounce to improve the risk/reward balance of chasing NFLX downward. I will be truly amazed if NFLX manages to beat out this latest topping pattern.
Be careful out there!
Full disclosure: no positions
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